- In 2023, an increased number of workers plan to ask their employers for better compensation: 35.5% in the form of an end-of-year bonus, 28% in a raise, and 48.1% in a cost of living raise, according to Workhuman’s November Human Workplace Index.
- 51.1% of employees indicated that they would leave their current employer to look for work elsewhere if spending freezes occurred in the form of compensation packets, the survey of 1,000 full-time U.S. workers found.
- With less expendable income at the ready, businesses will be more deliberate about providing raises and financial incentives for good performance, and making hires that could help ease the strain that certain workers might feel in their daily work, Scott Dussault, CFO of Workhuman said in an emailed statement.
Spending freezes — when companies decide to cut back on spending disposable income for a set amount of time— affect everything from compensation to hiring, explained Dussault. “In short, spending freezes have the potential to cause a consequential shift in how workers interact with their employers while negatively affecting the workplace experience,” said Dussault.
The data from the Workplace Index puts half of a company’s workforce at risk — with employees saying that if they do not receive a bonus or raise by the end of the year, they may jump ship. In terms of creative ways that CFOs can get ahead of this issue, “companies might consider giving workers raises at lower rates than in previous years,” said Dussault.
The disparity in supply and demand has fueled the employee-favored job market right now and has helped fuel a wage increase. “The paradigm has shifted, and employers can’t rely on the threat of a recession to keep employees from taking off and seeking higher-paying jobs. Compounding this, you have the fact that the Great Resignation inflated pay bands across the board, so people have higher expectations,” said Dussault.
As a result, workers are asking more from their employers in terms of compensation, as they are planning to ask for raises and bonuses in the coming year. But CFOs may find difficulties meeting these expectations as economic volatility persists.
“If companies want to still give employees the bonuses and raises they demand, they’re going to have to think creatively and be thoughtful about it. We’re facing strong economic headwinds, which means we have to trim costs to keep afloat. But at the same time, we can’t neglect what people need,” said Dussault.