56% of companies will increase average base pay by 3%
According to research by Payscale, fewer organizations plan to give pay increases this year. It found that only 80% of companies plan to give pay increases this year compared to 92% who planned to do so last year.
However, 56% of organizations say they will increase average base pay by more than 3%, up from 53% of firms last year who planned similarly sized increases.
Payscale also found that the percent of organizations planning to give formal pay increase twice annually has more doubled since last year, and 86% of firms will give raises out of cycle due to inflation, the rising cost of living and in preparation for pay transparency.
The report also found that with pay transparency on the rise, 45% of organizations currently include pay ranges in job postings, up from 22% last year. Additionally, 48% of organizations say pay transparency legislation is driving changes to improve compensation strategy.
Ruth Thomas, Chief Product Evangelist at Payscale commented: “Pay transparency is likely to continue expanding, with new legislation being proposed in more locations to ensure fair pay for employees. This is great news as pay transparency has been shown to help close the gender pay gap. In order to publish pay ranges with confidence, organizations first need to take on internal pay equity.”