Based on insights from more than 950 employers, compensation budgets are going up, but only slightly. Merit increase budgets are tracking at 3.2%*, while total increase budgets, which also include other types of budgeted base pay increases, such as promotion awards, are tracking at 3.5%. This is up just slightly from 2022 projections of 3% and 3.3%*, respectively, from our August Pulse — and an increase over 2021 actual increases of 2.8% merit and 3%* total increase budgets. While still representing a minority of employers, the percentage of employers providing increases of 3.5% or more doubled between the August and November pulses – from 13% to 27%.
It’s worth noting that incentive payouts are looking to be strong relative to last year, as 1 in 4 employers say they will have an overall bonus pool more than 10% higher than last year. Nearly half of employers say the bonus pool will be comparable to that of last year (within ± 10%), while only 7% say it will be more than 10% less than last year, 19% say they aren’t sure, and 1% say they will not pay bonuses.