SURVEY RESULTS: Tight labor market forces U.S. businesses to hike 2023 wage raises.

Photo credit: Rendy Novantino

The U.S. labor market has more available jobs than individuals to fill them, therefore salary budgets are expected to rise in 2023. WTW’s Salary Budget Planning Report indicated that companies are budgeting a 4.1% average salary rise for 2023, up from 4.0% in 2022. The biggest gains since 2008.
According to the report, two-fifths (41%) of U.S. firms have increased their spending since early this year. Less than half of companies (45%) stick to their compensation budgets. Some employers are increasing salaries more often. 36% have already increased or plan to boost salary increases. 92% of responders adjust pay twice a year.
Nearly three in four respondents (73%) see a tighter labor market as the key driver for higher spending. 46% of respondents said employees expect inflation-driven raises, and 28% altered budgets for better financial results.
Compounding economic conditions and new ways of working cause firms to reassess pay expenditures to remain competitive, says Hatti Johansson, research director, Rewards Data Intelligence, WTW. In a dynamic world, firms must have a clear compensation strategy and a deep understanding of compensation growth variables. If a company plans to boost budgets, it’s vital to be prepared to award and explain pay changes swiftly and effectively.
According to the report, firms continue to face attraction and retention concerns, but fewer respondents forecast the same next year. 94% of respondents have trouble hiring talent this year, but only 40% predict trouble in 2023. Similarly, 89% of employers had trouble retaining staff this year, but that percentage should drop to 60% next year.
Many companies use non-monetary incentives to attract talent. 69% of respondents have improved job flexibility, and 19% want to or are considering it. Six in 10 respondents (59%) have emphasized diversity, equality, and inclusion (DEI), and 24 percent plan to in the next few years. 49% of organizations continue to offer sign-on bonuses and equity/long-term incentive awards, and 21% plan to do so in the next few years.
Talent retention efforts are underway. 58% of organizations have emphasized DEI to retain more people, and 26% plan or are considering it. Half (50%) have enhanced remote work flexibility, and 25% plan or are considering it. Nearly 40% have adjusted their compensation programs (base wage, short- and long-term incentive plans), and 35% are planning or considering. Over 36% have improved their employees’ experience, and 45% are planned or contemplating it.
With a likely recession, high inflation, and talent supply difficulties, firms must get innovative to attract and retain talent, says Catherine Hartmann, global practice leader, Work, Rewards & Careers, WTW. “The workforce is varied and energetic. Employers must balance employee preferences and needs with a quality employee experience.

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*earns commission

The EEOC is focusing on artificial intelligence and algorithmic fairness in the workplace.

The EEOC is focusing on artificial intelligence and algorithmic fairness in the workplace.

Human hand and robot hand with binary number code and light on blue screen background 

The Equal Employment Opportunity Commission (EEOC) is initiating an attempt to ensure that artificial intelligence (AI) and other new tools used in hiring and other employment decisions are compliant with federal civil rights laws. The initiative will look at how technology is fundamentally changing how employers make hiring decisions, with the goal of guiding applicants, employees, employers, and technology vendors in making sure that these technologies are used fairly and in accordance with federal equal employment opportunity laws.

“Artificial intelligence and algorithmic decision-making tools have great potential to improve our lives, including in the area of employment,” EEOC Chair Charlotte Burrows said. “At the same time, the EEOC is keenly aware that these tools may mask and perpetuate bias or create new discriminatory barriers to jobs. We must work to ensure that these new technologies do not become a high-tech pathway to discrimination.”

  • Establish an internal working group to coordinate the agency’s work on the initiative;
  • Launch a series of listening sessions with key stakeholders about algorithmic tools and their employment ramifications;
  • Gather information about the adoption, design, and impact of hiring and other employment-related technologies;
  • Identify promising practices; and
  • Issue technical assistance to provide guidance on algorithmic fairness and the use of AI in employment decisions.

This is a work in progress. The new initiative builds on the Commission’s previous work in this area. Since at least 2016, when the EEOC convened a public discussion on the EEO implications of big data in the workplace, the Commission has been looking into the use of AI, people analytics, and big data in hiring and other employment decisions. In 2021, the EEOC’s systemic investigators underwent comprehensive training on the use of artificial intelligence in employment practices.

“Bias in employment arising from the use of algorithms and AI falls squarely within the Commission’s priority to address systemic discrimination,” according to Burrows. “While the technology may be evolving, antidiscrimination laws still apply. The EEOC will address workplace bias that violates federal civil rights laws regardless of the form it takes, and the agency is committed to helping employers understand how to benefit from these new technologies while also complying with employment laws.”

 

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