An exceptional context that has led companies to review their compensation policies.
As 2020 was a quiet period for many companies, mainly due to the lack of visibility linked to the health crisis, many of them had to revise their objectives for 2021. Indeed, the recovery that all sectors are experiencing is linked to catch-up on business and recruitment challenges, which should continue into 2022.
Compensation has already increased and will continue to increase over the coming year. But why anticipate 2022 wage increases?
We have observed a very tight labor market over the past few months. Companies are anticipating salary increases to ensure they retain their top talent. Candidates questioned themselves during the crisis, and the return to the office was a trigger for change for many. It so happens that these desires for change were often realized in a context of strong recovery.
This is a delicate time for employers who must redouble their creativity to retain their employees, even though the primary lever used (and certainly the easiest to implement) is compensation. Negotiations have already begun and, for now, salary increases are currently exceeding 10% (source: Les Echos Start) for talent staying with the same company. It should be noted that a candidate can expect an average increase of 15 to 20% when changing employers. The context is therefore very favorable for employees. This could counteract inflation that some economists fear.
We have seen many companies align with competing offers to try to retain their talent. Unfortunately, this attempt is very often too little, too late, and therefore ineffective. To avoid reaching this point, companies should take advantage of their good business performance to benefit their best employees.
However, important challenges remain for the months ahead.
- Company attractiveness: How to recruit and retain the best talent in a constantly evolving world and in a market where competition is broader?
- Gender equality: Although efforts have been made, particularly in positions requiring experience and management, women are largely paid less than men and remain underrepresented in these roles.
- Rebuilding corporate culture and workplace proximity among colleagues
These HR initiatives have an obvious link to the compensation methods practiced by companies. Compensation is one of the criteria that will push a candidate to choose one professional opportunity over another. But not only that, since today compensation is no longer the sole decisive factor for a candidate. There is a real paradigm shift taking place across all sectors (remote work policies, organization and management, etc.).
Furthermore, we have observed that 20% of candidates who previously lived in Île-de-France are now in other regions or have relocation plans, and it is very likely that this trend will accelerate. This could help achieve better balance and reduce salary gaps between Paris and the provinces.
Companies will need to find solutions to remain attractive and follow these latest trends.
AGENCY FOCUS: We conducted a survey in partnership with Stratégies on advertising agency salaries – Read the article “Advertising salaries on the rise“