This "return to normal" comes after two years marked by the imprint of the COVID-19 crisis, and in a context of relatively low inflation rates, marked tensions in the recruitment market and significant difficulties of attraction and retention of top talent.
This level of projected salary increases for the year 2022 represents an increase of 0,7 point compared to 2020 (1,8% on average) and of 0,4 point compared to 2021 (2,1% on average) . Taking into account the rate of inflation, the average salary increases for 2022 will represent a purchasing power gain of 1,4 points for French employees, with a forecast inflation rate of 1,1% in 2022, while this gain in purchasing power represented only 0,8 point in 2021, with an inflation rate of 1,3% in 2021.
In addition, it is important to note that more than 8% of the companies surveyed state that they have frozen salary increases in 2021 while less than 1% of companies foresee a complete freeze of salary increases in 2022. The share of companies that had frozen their salary increases in 2020 was over 25%; a direct effect of the COVID-19 crisis having had a significant impact on the financial health of companies.
The trend towards differentiation and recognition of the top performers is a reality that should be further accentuated in 2022 with the dual objective of attracting and retaining the best talent. The report highlights that the top performers are expected to receive 2022 times the average salary increases in 2,5. These talents are on average allocated 20% of the overall salary increases, while they represent only 10% of the workforce.
Average salary increases in 2022 should be more significant in the media (3% in 2022 vs. 2,3% in 2021), new technologies (2,6% in 2022 vs. 2,3% in 2021) and fintech (2,6% in 2022 vs. 1,9% in 2021). Employees in the energy and natural resources sectors (2,1% in 2022 vs. 1,7% in 2021), banking and insurance (2,2% in 2022 vs. 1,8% in 2021) and distribution (2,3% in 2022 vs. 2,1% in 2021) should benefit from less significant increases.
"The optimism of recent months, coupled with strong tension on the job market, especially for business development and digital professions, should encourage companies to release, in 2022, budget increases greater than those observed in 2020 and 2021, while returning to salary increases, frozen for two years for some. Nevertheless, a large majority of companies should move forward cautiously on this subject, based on the lessons of multiple economic waves and downturns. The reality of the salary increases actually allocated in 2022 could clearly differ depending on the evolution of the pandemic situation in the coming months ”, observes Khalil Ait-Mouloud, Director of the Rewards Data & Software Activity in France.
The study highlights a certain optimism about the evolution of the economic situation of companies. More than half (55%) of French companies surveyed state that their situation is “better” or “much better” than their forecasts.
In addition, almost a third (32%) of companies are planning a reinforced recruitment plan in the next 12 months, while only 7% plan to reduce these efforts. The functions that will concentrate the most recruitments are sales and development (59%), engineering (40%), technicians (39%) and finally digital and IT (35%).
“The relative and gradual economic recovery following the COVID-19 crisis, and after several waves of restructuring and recruitment reductions or freezes, should push French companies to strengthen in the short term. Commercial functions, which generate growth and added value, should experience very particular tension in the coming months. This will also be the case for functions whose objective is to support the digital transformation of companies and the development of multichannel distribution strategies ”, specifies Khalil Ait-Mouloud.
Notes
1. The “Salary Budget Planning” report is produced by Willis Towers Watson's Data Services. The corresponding survey was conducted in June 2021. Approximately 23 responses were received from companies in 000 countries around the world. 130 organizations in France responded.
2. The report summarizes the findings of Willis Towers Watson's annual salary development survey and reviews practices as a way to help companies plan their compensation for 2021 and beyond.
3. Inflation data, as of June 2021, is compiled by the Economist Intelligence Unit (EIU).