Table of Contents
Table of Contents
Compensation and benefits are incredibly complex HR functions, and significant changes to the way we work over recent years have made these areas more difficult still.
Help is at hand, however; our diligent research has gathered some of the latest and most important compensation and benefits statistics to empower your planning and labor market responses.
Companies with great pay and benefits have better retention
Job satisfaction is closely linked with compensation and benefits
Offering competitive compensation and benefits will help you attract job candidates
Employees and candidates value pay transparency
It’s important to pay all workers equitably
Compensation and benefits vary depending on location and cost of living
There are some benefits that employees view as must-haves
Lifestyle benefits are increasingly popular
Companies with great pay and benefits have better retention
The Great Resignation has contributed to a tough labor market where it’s increasingly hard to find and retain the best employees. It almost goes without saying that paying more will help to attract and keep key talent—however, the benefits offered by employers are very important too.
Statistics demonstrate that paying more and offering better benefits can have an exponential return on investment.
46% of workers say salary or bonus is the greatest motivator for staying at their current company
10% higher base pay is associated with a 1.5% increase in the likelihood an employee will stay
A $1 per hour pay increase can result in a 2.8% increase in rates of retention
A $1 per hour pay loss can result in a 28% increase in turnover
If offered more benefits, 73% of employees would stay with their employer for longer
Employees who are satisfied with wellness programs and benefits are 1.6 times more likely to stay with an organization
56% of employees say perks are very or moderately important when evaluating a job
30% of employers plan to increase wages in 2023
To retain employees in response to supply and demand pressures, 53% of businesses have plans in place to aid in the retention of employees
14.% of employers plan to increase benefits to help with retention
Job satisfaction is closely linked with compensation and benefits
Offering higher wages and better benefits packages can not only attract and retain employees, but it can also increase job satisfaction. This in turn increases productivity and business profitability.
Wellness and lifestyle benefits can also be major contributors to job satisfaction and more productive work time. These types of benefits can reduce stress and eliminate employee burnout.
Holistically healthy employees are 74% more likely to be satisfied with their job
Studies show corporate wellness programs return an average of $3 for every $1 spent
60% of employees with family income above $75,000 say they get a sense of identity from their job
68% of workers making more than $150,000 per year reported being “very satisfied,” with their job versus only 40% of employees making under $50,000
60% of employees rate compensation as very important to job satisfaction, and 36% rate it as important
72% of employers say stress and burnout are a challenge or concern for their organization
25% of Americans do not believe they are well paid for their work
54% of organizations are increasing pay in order to retain talent
There is an 83% gap between the benefits employees have and what they want when it comes to extended health and well-being support
Offering competitive compensation and benefits will help you attract job candidates
New employees will be attracted to companies that offer excellent compensation and benefits packages. And when existing employees are well rewarded and have greater job satisfaction, they’re more likely to refer people they know for open roles.
Employees who are content with their employers’ time and location flexibility are over two times more likely to recommend their organization to other job seekers
62% of employees say they choose their employer based on an attractive salary and benefits
One in five businesses are considering inflation when they set wages
69% of higher-income earners find their work meaningful versus 60% of lower-income earners
64% of workers say a significant increase in income or benefits is “very important,” when choosing their next job
36% of companies are offering better pay and benefits to address recruitment difficulties
Employees and candidates value pay transparency
Transparency is critical in today’s workplaces. Employees want to be clear about what compensation they will receive and how this compares to their colleagues’ pay. This transparency can be an important factor in whether a candidate applies for a job or attends an interview.
The statistics show that some companies are still way behind when it comes to transparency practices.
70% of employees want some form of pay transparency
One in six employers report a rise in applications after implementing pay transparency initiatives that disclose salary in job postings
One-third of job candidates need to know the salary range for a role before deciding whether to interview
62% of employers are planning or considering disclosing pay rate information in the future
16% of companies that disclose pay rates see a greater number of candidate applications
17% of companies practice pay transparency, but 41% discourage the discussion of salary information
54% decline job offers based on salary
It’s important to pay all workers equitably
There is certainly no place in today’s workplaces for inequitable pay or pay discrimination, and this knowledge should be at the forefront of an employer’s wage and hiring decisions.
Again, transparency of equal pay policies and practices is vital for fostering diversity and for attracting new employees.
Unfortunately, we are still some way from seeing complete pay equity.
At the current pace, it will take another 132 years to achieve complete pay equity
80% of employers say meeting the needs of employees across all life stages and the diversity spectrum is an important benefits objective
Women still earn 82 cents for every $1 a man earns
White women in the US earn around 79% of what white men make, but black women earn only 63%, Native American women 57%, and Hispanic women 54%
Full-time LGBTQ+ workers earn 10% less than other workers
33% of North American organizations are already disclosing information on how they manage pay equity
68% of women feel less knowledgeable about who makes compensation decisions compared to 75% of men
Full-time workers are at least twice as likely than part-time workers to have benefits
Compensation and benefits vary depending on location and cost of living
Salaries and benefits do vary from region to region, and the local cost of living is a key factor in any differences. Rising inflation and growing costs of living mean that today, salary increases can lag behind.
71% of employers with workers in more than one location give regional pay differentials
57% of organizations are applying a geographic pay policy
The average salary increase is 3.4%, less than half the rate of inflation
Regions with lower inflation have lower average expected pay increases for 2022; for example, Japan’s rate of inflation is 0.5% and the average pay increase is 2.6% versus 3.4% in the US
100% of employers in the US, 87% in Western Europe, and 78% in Asia Pacific expected to increase salaries in 2022
Only 50% of employers in the Middle East and Africa planned to increase salaries in 2022
There are some benefits that employees view as must-haves
In a changing world of work, employee expectations for benefits are changing. More employees would like to see wellness and lifestyle benefits, and many want flexible working practices. Still at the top of benefits must-haves, though, are health and retirement programs.
77% of working Americans view retirement savings as their most important benefit
88% of employees rate health-related benefits as very important, and 82% rate retirement benefits as very important
70% of employers view family care benefits as important
52% of employees say flexible work practices will impact whether they stay at their organization
56% of employees would trade a salary increase for certain perks
60% of people report benefits and perks are a major factor in considering a job
88% of organizations offer programs to support emotional well-being, up from 66% in April 2021
Social wellness and belonging activities are second most welcome according to 37% of employees and are only available in 67% of organizations
68% of employees say their employers don’t offer corporate wellness programs but wish they did
Lifestyle benefits are increasingly popular
Lifestyle benefits go above and beyond medical, dental, and retirement plans and can include flexible work practices, additional leave, wellness programs, and even free lunches. Employees value these benefits greatly and will choose employers accordingly.
Holistically, healthy employees are 53% more likely to be productive
30% of employers report that advertising roles as open to flexible working is the most effective way to attract candidates
86% of organizations have formal policies like paid time off, parental leave, and flexibility to support well-being, an increase from 65% in April 2021
82% of employers say leave benefits are very important
70% of employers are considering adding a Lifestyle Spending Account (LSA) to their benefits package
Employer programs to support employee well-being increased by 22% in 2021 alone
Half of all workers report their mental health has deteriorated since the start of the Covid-19 pandemic
15% of employers plan to introduce or improve benefits
Using Compensation and Benefits More Strategically
The statistics make it clear: compensation and benefits play an enormous role in the way you attract and retain quality talent. If you expect employees to give their all, you have to be willing to pay them what they’re worth and provide the benefits they need and want. Here are a few things you can do to make sure your compensation and benefits are up to scratch.
- Be strategic about compensation. Paying your workers right takes a lot of research and decision-making. Create a compensation strategy to guide your overall approach (will you lag, meet, or lead the market?), then benchmark individual jobs to make sure your salaries are attractive.
- Be transparent and fair. If you’re not already, consider demonstrating your commitment to pay transparency by adding a salary range to job postings. This, combined with a solid compensation strategy, will ensure that all your employees are paid equitably.
- Offer as many benefits as you can. Research the different types of employee benefits out there, and offer whatever you can afford. Start with the basics: health insurance, dental and vision insurance, and paid time off.
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