In the midst of historic inflation, employees’ salaries aren’t keeping up
LINDON, Utah, September 21, 2022 — BambooHR, the industry’s leading cloud-hosted software provider dedicated to powering the strategic evolution of human resources, released a new study of 1,000 U.S. adults examining worker sentiment around compensation and benefits and found that money matters most—over half (51%) of employees say they’d stay with a company or job they dislike if the salary is high.
In June 2022, inflation in the United States rose to 9.1%, its highest level in over four decades. However, rising prices don’t necessarily mean rising paychecks. The survey found that one in three (36%) salaried workers reported not having received a salary increase during the past 12 months.
While employers are scrambling to hire and retain top talent, employees are wondering if their compensation is matching what they’re really worth.
“No matter how fulfilling a job is, salary is significant,” said Anita Grantham, head of HR at BambooHR. “Our study uncovered how employees really feel about compensation and what HR leaders can be doing differently when it comes to salary transparency and total compensation. Understanding these trends has never been so important as employers focus on improving employee engagement and retention.”
When salaries don’t rise, dissatisfaction does, especially among women in the workplace.
- Over one-third of employees say their compensation is directly associated with their mental health and this feeling is significantly more prevalent with younger workers:
- Over half of Millennials (54%) and 44% of Gen Z say that their compensation is directly associated with their mental health, compared to 27% of Gen X and 19% of Boomers.
- Nearly a quarter (23%) of employees describe negative emotions regarding their financial compensation at work—13% feel frustrated and 7% even feel resentful—but women are more likely than men to report being dissatisfied with their most recent salary increase (21% women vs 14% men).
- More men report having a salary increase in the past year than women (66% men vs 62% women) and out of those who received a salary increase, men on average received a 6.39% bump compared to women at just 5.24%.
Over a third (38%) of workers say they have compensation reviews annually but that doesn’t mean everyone is on the same page. More than one-third of employees also say they didn’t know anything about their current company’s benefits until onboarding. So who is responsible for starting the conversations and ensuring transparency?
- Although half (47%) of salaried employees say employees should always be the ones to initiate compensation discussions with their employer, nearly a quarter (22%) don’t feel comfortable bringing up compensation proactively.
- Employers are taking the initiative by starting the conversation. For salaried employees, the average review happens every 8 months and 16 days.
- And, employees are anticipating them. 75% of workers prepare for compensation discussions with their employer. How do they prepare?
- Researching similar roles online (32%)
- Basing their desired compensation on past job history (30%)
- Asking other people in their industry about their compensation (28%)
- 60% of employees say that when they’re job searching they rule out employers who aren’t transparent about salary.
Salary is important, but it isn’t the whole picture. Benefits are so critical to employees that many would be willing to take a pay cut for them and if they don’t get what they need, they’ll quit.
- 30% of employees have left a job solely due to the benefits package.
- Some employees would take a salary cut for certain benefits:
- 41% would be willing to take a 7.8% salary cut for health insurance benefits
- 38% would be willing to take a 7.6% salary cut for paid time off benefits
- 37% would be willing to take a 7.6% salary cut for flexible work locations and/or hours
- Work life balance is also top of mind. Salaried employees say flexible work hours and location are nearly as important when considering a job offer as dental and vision benefits.
To read more in the full report on employee sentiment around benefits and compensation or tips for people managers, visit: https://www.bamboohr.com/resources/guides/compensation-trends