By Margaret Jungels
Halloween’s upon us, but it’s not just ghosts, ghouls, and goblins that are keeping us up at night. Even without Covid-19, these recent months of wildfires, social unrest, politics, hurricanes, and murder hornets are enough to push even the most zen among us over the edge.
To top it off, amidst all this uncertainty, it’s time to start planning next year’s budgets! How do you predict anything about next year while still in a year full of “unprecedented times”? What costume or cape can you put on to possibly help with this task?
Good advice for our kids, is good advice for all of us right now: focus on what you can control and things that matter.
As your leadership team contemplates 2021, the things that you can control, and the things that really matter, reflect on how you have been able to survive 2020—your employees and their ability to adapt, innovate, and pivot weekly, if not daily. So, when thinking about how to budget for salary increases in the coming year, what should you do? What can you do?
- You can put together a process. Document the process. If you have a process from a previous year, review it, update it, and share it with everyone who touches it—people managers, finance, HR, and payroll. Make sure that people know what is expected of them, remind them in advance of due dates, and update the plan as you go. (This you can control)
- There’s a lot to think about when determining how to allocate your salary budget. How have labor markets changed in the past year? Do some departments or roles compete for talent differently than others? Has Covid-19 created hot or hard to fill jobs? But beyond all this, the issue of pay equity is here to stay. Allocate your salary budget in a way that advances pay equity. Let an analysis of current pay equity direct your budget allocation and drive changes to the way you pay, develop, and promote. Even with a relatively small budget, you can make sure that pay changes are advancing pay equity. (This matters)
And even though the world seems topsy-turvy, there’s still a lot that hasn’t changed. According to Willis Towers Watson’s 2020 North American Compensation Planning Pulse Survey, 84% of companies plan to deliver their pay increases on schedule. And while some companies (approximately 35%) plan to lower salary increases next year, the survey predicts a 2.6% average salary increase for non-executives—not so far off previous years. According to PayScale Market Trends the Technology and Transportation sectors remain strong and lead annual increase trends, but most other sectors are still doing relatively well. In some cases, even in Entertainment and Hospitality who have seen many layoffs, market rates of those who remain employed have been driven up.
Finally, two things we can promise you—we’re here to help you navigate these tricky times, and, we’ll save you some fun-sized Kit Kats for when we can meet in person again!