Newsbreak: Fewer Employers Offering Salary Increases in 2023, Focus Shifts to Non-Monetary Benefits!

Payscale’s 2023 Compensation Best Practices Report shows that fewer employers plan to offer salary increases this year. According to Payscale’s report, only 8 out of 10 organizations will provide base pay raises, down from over 9 out of 10 last year, as reported by Yahoo on February 23, 2023. Additionally, 15% were unsure if they would offer pay increases, up from 3% last year.

For employees that do receive salary increases, they should not expect raises that will help offset inflation rates. While more than half (56%) of employers surveyed stated raises would be above 3%, the average raise will be lower in 2023 than it was in 2022, according to Payscale.

Despite the fact that fewer workers are expected to leave their jobs this year, compensation remains a top challenge for employers. To address this, more organizations are giving formal pay increases twice annually, increasing from 4% in 2022 to 11% this year.

While salaries may not be increasing at expected rates, employers are offering other benefits to make up for this gap. Mental health or wellness programs, paid sabbaticals, and extended family leave have all increased, as have benefits such as help with student loan repayments, financial and debt services, travel benefits, and the four-day workweek.

It Is important to note that over half of US states and many countries have passed salary history bans, forbidding employers from asking applicants to disclose their current or most recent salary. However, 11% of employers still persist in asking prospective employees about their salary history, despite it being illegal in some places.