US firms facing tight labor market revise pay, reward plans

Abstract

Dive Brief: U.S. companies confronting a tight labor market and the worst price pressures in four decades are expanding employee training, offering workplace flexibility and increasing both the amount and frequency of pay raises, according to Willis Towers Watson. Nearly nine out of 10 employers are hiring employees at the higher end of salary ranges, 84% have given staff more flexibility in where they work and 81% offer sign-on bonuses, WTW found in a survey of companies in North America. C-suite executives "Recognize that they will need to pull levers in addition to compensation and reinforce a connection to the overall employee experience." Dive Insight: Firms facing the most constricted labor market in decades are fine-tuning their pay and rewards programs while trying to outcompete rival companies in employee recruitment and retention. U.S. companies hoping to retain workers plan next year to raise pay on average by 4.1% - the largest increase in 15 years, WTW found in a survey. Nearly one out of four companies have increased their salary budgets, and 44% are planning or considering doing so, WTW said, citing a survey of 884 companies across North American employing more than 15 million employees. Only 28% of companies plan to match raises with increased inflation for all staff, Gartner said. "In addition to work flexibility, organizations can bring forward the vesting dates of stock options, or repricing stock options that are under the water." At the same time, 45% of companies have increased the frequency of career conversations with employees and 21% have sped up the timing for promotions, Rathindran said.