Zoe Woolacott | 28 Sep 2021

Pay Planning for 2022

As employers prepare their reward strategies for 2022, the 83 respondents in IDR’s annual pay planning survey describe the challenges they face as they plan for a world beyond coronavirus. Pay pressures are strengthening, and recruitment and retention issues have become increasingly prevalent. Employees are facing increases in the cost of living, and the pandemic has accelerated expectations on organisations to prioritise employee health and well-being. An emphasis on diversity and inclusion remains on the agenda, as well as a focus on improving environmental credentials. Against the background of the continuing pandemic, many reward specialists must balance these pressures with affordability concerns.

The findings from our research reveal that next year is likely to involve a sharper focus on pay than in 2021. Market benchmarking is much higher up employers’ agendas for 2022, with some 87% of our survey respondents intending to benchmark pay levels next year. The increased attention to pay is connected to both the growing difficulties with recruitment and retention, with a tighter labour market in the wake of the economy reopening, and concerns over affordability. 

Looking ahead, the outlook for pay awards in 2022 looks brighter from employees’ point of view with half of respondents anticipating that the level of pay rise will be higher next year than in 2021 and 43% predicting the level will stay the same. Just 7% of employers in our sample expect that the pay award will be lower in 2022 when compared to this year’s outcome.

Full findings from the research are available in IDR's 'Pay Planning for 2022' report, which is based on the results of our survey conducted during the summer of 2021. The survey received responses from 83 organisations, together employing nearly 1 million workers in the UK.

For further information on the report, or to order your copy, please click below: