Access to timely information has always been a necessity. This fact has been made more relevant given the ongoing pandemic and resulting labor dynamics. ASE strives to bring its members timely benchmarking information, and we are pleased to release two key surveys this week to the membership.
2021/2022 Salary Budget Survey
First, ASE released the 2021/2022 Salary Budget Survey. This survey, conducted annually, focuses on what companies are budgeting for wage increases in 2021 and 2022. There was a lot of anticipation around this data given the labor shortage and apparent pressures on wages. Now the results are in. Excluding those companies with no increase, average actual and projected merit adjustments for all employee classifications was 3%.
An average projected merit budget for 2022 of just 3% may be surprising to some given what we are experiencing on the ground. It should be noted that projections for 2022 is still a question mark for many employers. Our survey shows that slightly more than 40% of companies have not determined their 2022 increase budgets.
Other national surveys are reporting similar salary increase projections. For example, WorldatWork, a large national association for compensation professionals, is reporting that total increase budgets are projected to grow to 3.3% on average in 2022. Total increase budgets may also account for other adjustment such as promotional budgets or equity adjustments.
Data from the ASE’s survey shows that a majority of companies are providing increases to employees. In fact, just 11% of employers froze or delayed salary adjustments this year, compared to nearly 5 in 10 employers (46%) last year. This will undoubtably raise the perennial challenge determining how those dollars are allocated. The survey shows that 53% of respondents will provide all employee groups some merit dollars with the largest allocation going to top performers and the smallest amount of dollars going to low performers.
2021 Employee Turnover Survey (Mid-Year Report)
ASE has also released its revised employee turnover survey. This survey, the 2021 Employee Turnover Survey (Mid-Year Report), is a replacement to our Quarterly Economic and Employment Survey. We intend to conduct this survey twice a year – January and June. The data for this mid-year report reflects turnover over a six-month period from January 1, 2021, to June 30th, 2021. Total voluntary turnover during that period was slightly more than 7%. Our data suggest that smaller companies experienced higher levels of turnover than large companies with turnover rates across all employee groups as high as 11.5% for companies with fewer than 150 employees.
“Better salary” was the most often cited reason for turnover among all employee groups. Among hourly employees, 62% of companies reported salary as the most significant driver of turnover followed by personal problems (family, health, etc.) at 43%. However, among the exempt population, 34% of companies cited retirements as a driver of turnover. That was the third most cited reason within that employee population, with advancement/promotion opportunities being the second most cited reason at 39%.
Lastly, the survey is also reporting that much of the hiring difficulty is within the production and professional/technical job groups. Nearly 40% of companies indicated that hiring in that group in the last 12 months has been “Very Difficult.”
Much of what is occurring in the labor market is without recent precedent, and as a result, requires more frequent monitoring of data from a variety of sources. We are grateful to those companies that participated in these two reports. Access to these reports is available to ASE members at no cost and can be found in your Dashboard at www.aseonline.org. Non-members can request to purchase the survey results by completing this form.