For Peak Employee Experience, Just Add Pay

What keeps your employees up at night? A Mercer study conducted in late summer of 2022 found that it’s more simple - and more serious - than you might imagine. In a sudden shift, pay has suddenly become the number one factor in employee satisfaction.

The survey, which is given annually to workers at companies employing more than 250 people, asks about the top concerns on employees’ minds at the moment. This year, employees are more concerned about their fiscal (and physical and emotional) well-being than they are about climbing a corporate ladder.

These big jumps, particularly in "covering monthly expenses” - which rose from #9 to be the utmost concern for employees in 2022 - and in “being able to retire,” which also rose, from #5 to #2, at first seem unexpected, but a look at what’s going on across the globe offers some insight into why this trend is happening and what employers can do about it.

Why the shifting employee concern with finances?

An enormous reason for this hyper-focus on compensation is that, in the U.S., inflation rates are high, having increased by 8.2% since September of 2021. Compare that to an increase in wages by 5% from last year, and you’ll see how a “cost of living” increase in base pay is not enough to help employees sleep better at night.

Another cause behind the concern? The continued drive of employees in a post-pandemic world to work to live, not live to work. Employee needs are changing and they are making it known - with their words and with their actions - that they want to work at companies that provide them with access to a healthier experience both at and outside of work.

Feeling apprehensive about raising pay in an uneasy market?

You’re certainly not alone. The massive wave of tech layoffs in the news (think Twitter, Meta and Lyft), which represent 15% of all tech layoffs for the entire year, happened in just one week. We know that these layoffs and hiring freezes are likely indicative of a bumpy road ahead for the economy and, as an employer, it makes sense that increasing the rate of pay isn’t at the forefront of your concerns.

In addition, you’ve likely already made some expensive changes to your compensation strategy in the past several years. Non-cash benefits (leave, flexible work arrangements, health care) for employees have increased by 32% in the past ten years, and are the sources of 33% of payroll at most American organizations according to the Borough of Labor Statistics.

So, now what?

The first step is to do some org-specific diagnosis to determine what your employees are worrying about today. Find spaces to get authentic input from the people who work for you and use their voices to support you with determining where to focus your change energy. Depending on what you already offer, you may be pleasantly surprised to learn that you don’t need to make as many changes as the Mercer survey initially suggests.

Then, take this information back to your C-suite. Payment as a C-level issue is a very of-the-moment approach, and your team needs to have a serious conversation about where and how you want to spend your dollars to attract and retain talent. The most successful organizations have a clear pay strategy that is well-communicated to employees and revisited and revised on a regular basis. These strategies must be focused on equity to be successful, which is where compensation benchmarking can be helpful. Remember as you have these conversations that employee compensation (including salary and benefits) is a huge part of your company’s image.

Next up, consider what benefits you could add to support your employees’ sense of fiscal well-being. The Mercer report suggests different options, including educational seminars on budgeting and debt management, providing resources for emergency and short-term savings via company benefits, and targeted support to common long-term goals, such as home ownership or retirement. Addressing these concerns proactively may help employees feel more empowered when making financial decisions.

Another huge consideration is how you allow for flexible work in your employees. We get it: It’s not always easy to offer full-on remote options. But, with workload/life balance, physical health, and mental health all being top five concerns, it makes a ton of sense to consider increasing flexible work if you can, or - if that’s just not on the table - allowing for additional “time off” benefits (shift choices, flexible vacations, etc.) for those who need to be in-person to do their job.

Not feeling confident?

We get it. This is a lot to balance in an iffy time. Let us help you craft a pay strategy that will work for your employees and your organization.