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In the to do list of human resources departments of large companies, finding solutions to the salary question continues to remain at the top. This is confirmed by the adjustments to the budgets for the increases, but also the targeted interventions that are carried out by over a third of the organizations and which are designed, together with other tools, with a view to employer branding. As can be the retention bonus, which is starting to spread more and more.
Estimates for 2024
In 2024 payrolls will continue to increase and, if there is the expected slowdown in inflationary growth, Italian workers will be able to see that real improvement which in recent months has been absorbed by inflation which continues to remain at very high levels. With the latest Salary Budget Planning report, created involving 700 large companies, WTW (Willis Tower Watson) concludes that in 2024 wage budgets for Italian employees will grow by 3.7%, after the peak of 3.9% in 2023. Although this is a decrease compared to the actual average increase of 3.9% in 2023, it is still above what was observed in 2022 (+3.3%) and in 2021 (+2.4%).
The attraction of talents
The CEO of WTW, Edoardo Cesarini, explains that for 2024 we can make «a forecast well above those of the last 10 years. This shows that companies are making an effort to remain competitive in an unstable working climate, although the difference between wage growth and inflation is still negative: to see real growth in wages, we will have to wait for 2024». The salary increase is not a factor to be underestimated, especially for those who have to attract talent: «Companies that have a clear remuneration strategy and a good understanding of the factors that influence it – continues Cesarini – will be more successful in attracting and retaining employees, keeping pace with a changing environment in which the certainties of the past are no longer valid».
The inflationary pressure
The main factor influencing changes in wage budgets is inflationary pressure. This is stated by almost three quarters (70%) of the Italian employers interviewed. The second is the concern about a possible tightening of the labor market (53.8%), while factors such as the possible economic recession (22.1%), employee expectations (21 .8%) and cost management (21.5%).
economic measures
Nearly half (46%) of the 700 companies surveyed in the Salary budget planning report say attracting and retaining employees is still a challenge. A percentage that in the next 2 years seems destined to decrease (32%). To respond to the ongoing pressure, organizations are taking more measures. More than a third (37%) have increased wages and a similar percentage have initiated a comprehensive compensation overhaul for all employees. Other measures taken include base salary increases (36%), hiring people in relevant salary ranges (35%), targeted base salary increases (34%) and increased use of retention bonuses (27%) .