How Employers Are Managing Compensation Challenges in 2023

With 2023 well underway, many employers are still trying to find the right levels of pay for their employees. The stakes are high: If employers don't get compensation right, they may find themselves losing out on talent.

The quest to attract and retain talent over the past year has already caused employers to push pay levels higher than initial projections. Data from consulting firm WTW shows that 70 percent of U.S. employers spent more than they expected to adjust employees' pay levels last year. Now, there are signs that this trend may continue in 2023. READ MORE

Merit increases spike, but is HR really ready to talk about pay?

While it may not come as much of a surprise—considering the national unemployment rate of 3.4% is at its lowest since 1969—employers looking to keep much-needed talent in the fold are turning to merit raise increases as a primary retention strategy, according to a recent survey. However, employers have their work cut out for them when it comes to designing and communicating about changing pay practices. READ MORE

Companies are using layoffs to cut new-hire salaries and win back the power they held before the pandemic

In late 2020, Keri B., a recruiter, was working with a professional-services company that was desperate to hire.

It was so eager, in fact, that the candidate she placed managed to negotiate a starting salary that she said was $20,000 more than their new boss was making. "That was the first time that I was like, 'Wow, this is crazy,'" Keri, whose last name and place of employment are known to Insider, said. "I'm seeing people who are new grads just out of school getting really, really high salaries." READ MORE

Factors That Will Impact Proxy Season 2023

Choppy market valuations, more engaged shareholders, and new regulations will create new challenges for corporate governance in the upcoming proxy season. Companies and boards should anticipate pressure from stakeholders regarding director elections and say on pay, high numbers of shareholder proposals on environmental and social matters, and added disclosure in proxy statements.

Broadridge’s analysis shows that in 2022 the most directors over the past five years failed to attain majority support, there was a decline in shareholder support for say on pay, and there were more shareholder proposals than at any time over the preceding five years. Directors and management should expect the following factors to weigh on the upcoming 2023 proxy season: READ MORE

SEC Adopts Final Executive Compensation Clawback Rules: What This Means and How to Prepare

On October 26, 2022, the Securities and Exchange Commission (SEC) adopted final rules that will require public companies to implement policies to recover, or claw back, erroneously awarded incentive-based compensation from current and former executive officers in the event of an accounting restatement, regardless of whether the executive officer was in any way responsible for the causes of the restatement. The SEC originally proposed clawback rules pursuant to the requirements of Section 10D of the Securities Exchange Act of 1934 (added by Section 954 of the Dodd-Frank Act) in July 2015. These rules remained dormant until October 14, 2021, when the SEC reopened the comment period on its proposed rules twice (on October 14, 2021 and June 8, 2022), leading to the adoption of final Exchange Act Rule 10D-1 (Rule 10D-1) at the end of October 2022 with certain changes in response to the collective comments received. READ MORE

Fostering a Culture of Pay Transparency

Openly discussing individual salaries is slowly becoming less taboo as younger generations enter the workforce, but it does not mean an employer has to go “all in” to embrace pay transparency in pay administration.

Transparency in compensation practices can positively impact workplace culture. Pay is a sensitive and personal subject for many, so when staff are comfortable and feel trusting in this area, it can translate to overall trust in the organization. READ MORE

Compensating for compensation: Keeping talent when dollars don’t work

Competitive compensation has always been essential to attracting and retaining talent. And today, it’s become an increasingly significant piece of the puzzle. Recent US job growth numbers amplify the hyper-competitive hiring conditions in many sectors. Inflation places pressure on family budgets. And pay transparency allows people to not just imagine that the grass would be greener elsewhere, but to calculate exactly how much more “green” they might expect to tuck away in their wallets if they made a move. READ MORE

Why Pay Equity Needs To Be Addressed Now

Pay equity is a hot topic for people leaders. New pay transparency laws are only going to make it hotter. Organizations are under increased pressure to address pay disparities and ensure that all employees get fair treatment. Why the urgency? As compensation information is made public for new roles, current employees will have access to this information and become aware of disparities. So to retain your best talent, prioritize your compensation adjustments accordingly. READ MORE

Pay transparency is good for workers — and employers see more of the top job applicants

Posting salary ranges on job listings is the smart move for employers looking to attract stronger candidates and build a relationship based on mutual trust from the get-go.

One in five Americans live in a state that requires pay transparency. For companies, colleges and public agencies in states that don’t require salary disclosure, it makes sense to stop listing “competitive salary” and start providing potential job candidates with meaningful financial information upfront. Why waste your time or theirs on one or two interviews that are likely to end with a rejected offer? READ MORE

Proxy Advisory Firm Policy Updates for the 2023 Proxy Season

In preparation for the 2023 proxy season, proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) announced updates to their voting guidelines for investors, effective on January 1, 2023, and February 1, 2023, respectively. Several updates to these guidelines relate to environmental, social, and governance (ESG) topics, including—as discussed below—updates related to climate-related accountability and climate disclosures as well as racial equity audits. The firms’ approaches to ESG, including their guidelines, recently drew criticism as 21 state attorneys general sent a letter to Glass Lewis and ISS accusing the firms of violating their fiduciary duty by prioritizing social goals over the financial interests of their clients. READ MORE

Are executive pay cuts the ‘bold move’ your organization needs?

As concerns over a slowing economy drive continued layoffs, particularly in the tech industry, individual contributors aren’t the only ones feeling the impact. In the last few weeks, a number of large firms have announced pay cuts for their highest-paying executives, creating what experts say could be an opportunity for HR to boost employee morale, and ideally, drive retention. READ MORE

10 jobs with the biggest salary increases in 2023

While news of big corporate layoffs and growing interest rates have left many workers nervous about their earning potential, it looks like the job market remains competitive — for some more than others.

Adzuna, a job search engine, examined 17.9 million U.S. jobs advertised on their site, comparing the salaries posted in November 2021 to those posted in December 2022. Certain roles are seeing substantial salary increases, hinting at the continued effort companies are making to recruit new talent. READ MORE

Companies save billions of dollars by giving employees fake "manager" titles, study shows

Would you rather be a front-desk clerk or "Director of First Impressions"? A barber or a "Grooming Manager"?

How you answer could mean a significant difference in annual earnings. That's because companies routinely inflate workers' titles to avoid paying them in full for overtime work, according to researchers from the University of Texas and Harvard Business School. READ MORE