The workplace and labor market today is a volatile mix of variables, including the economy, tech layoffs, inflation, pay transparency, remote work and the move by some companies to bring workers back into the office.
One of the biggest changes: More employees are staying in their current jobs whenever possible. According to a survey of more than 4,900 companies around the world included in Payscale’s 2023 Compensation Best Practices Report, voluntary turnover (people who voluntarily leave their jobs) went from 36% a year earlier to 22% in 2022 return.
In the tech industry, the voluntary turnover rate declined even further, to about 19% in 2022, according to the Seattle-based compensation software and data company’s 14th annual report.
One reason: Economic uncertainty and tech layoffs are making some employees reluctant to take the risk of leaving their existing jobs. These factors give employers more leverage in determining compensation and benefits.
Some employers are using this extra leverage to set new policies for employees returning to the office, limiting their ability to work remotely. Amazon is a prominent example, recently telling its corporate and tech workers to be back in the office at least three days a week.
But when looking at the overall job market, there are still several factors working in workers’ favour. Below:
- The job market as a whole remains tight, with 60% of companies still saying they had more trouble attracting and retaining talent in 2022 compared to previous years.
- In addition, thanks to laws and guidelines on pay transparency, many employees also have more data available in compensation negotiations.
- The pandemic has also created new expectations around remote work, workplace flexibility and benefits.
“Although employers are reclaiming some of that power, it’s still a workers’ market. And I think it’s going to remain an employee market for the foreseeable future,” said Lexi Clarke, Payscale’s chief people officer.
This back and forth is reflected in compensation trends. While the majority of organizations surveyed plan to provide a base salary increase in 2023, the percentage of planned salary increases has decreased from the previous year (about 80% vs. 92%). In addition, fewer organizations are planning an excessive (>5%) increase in base compensation this year.
The global survey of compensation leaders, HR professionals and corporate executives was conducted from October 2022 to December 2022.
The full report can be found here. Payscale’s Lexi Clarke joins us on this episode of the GeekWire podcast to discuss the trends in more detail.
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Edited and Produced by Curt Milton; Theme music by Daniel LK Caldwell.