- Pierre Lamblin, director of data and studies at Apec
- Marc Grosser, former HRD and Topics expert
- Khalil Aït-Moouloud, director of the compensation survey activity at WTW
- Franck Chéron, human capital consulting partner at Deloitte.
91% of executives receive individual raises
53% of executives are calling for mostly collective increases, according to the latest Apec barometer. Compared to March 2022, they are even 14% more to make this request. Will they be served collectively at least as much as the other categories of employees?
Not so sure. The annual Observatory of social performance and compensation LHH points out that only 47% of executives against 71% of workers, employers, technicians and supervisors, should benefit from general increases. Increases of around 2.11% (median rate). On the other hand, individual increases (1.66%) concern 91% of executives. As we can see, executives and their employers are not at all on the same wavelength when it comes to the type of increase.
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Several factors may explain this wish expressed by managers to benefit from more collective increases. And first, of course, the rising cost of living.
1- Individual increases no longer compensate for the loss of purchasing power
“Two-thirds of executives say they are worried about their purchasing power. Of which 13% are very worried”, observes Pierre Lamblin, director of data and studies at Apec. And this is not a feeling but a reality. “When they do their shopping, executives see the result in their wallets. And we are in a tunnel of which they do not perceive the end. Managers even know that with the energy crisis, the worst is probably ahead of us,” he specifies.
2- With their purchasing power declining, they see themselves in the same boat as other employees
“With 1.5 to 2% inflation, socially, it was OK not to increase certain employees. They weren’t losing too much purchasing power. Now with galloping inflation, it is illusory to think that individual increases could compensate for this loss of purchasing power. The executives have understood this well. analyzes Marc Grosser, former HRD and Topics expert.
They need to boost their purchasing power now. They are now more about immediacy than promises about the future. “These general increases could, for example, allow them to offset the cost of their trips on the spot”explains Franck Chéron, human capital consulting partner at Deloitte.
3- Individual increases deemed arbitrary
Unlike general increases, individual increases are not perceived as fair enough.
Khalil Aït-Moouloud, director of the compensation survey activity at WTW
“Since 2015, the trend has been towards the individualisation of remuneration. However, the messages from employers on the criteria for granting these individual increases are not clear. With an envelope of 2% for individual increases, some will get 1.5%, others 4%, still others will get nothing. Executives do not know which levers to activate to benefit from it. They may have the impression that they are granted at the head of the client and in a discretionary way”, explains Khalil Aït-Moouloud, the WTW expert.
4- More reassuring collective increases
It is a classic of the changes of conjuncture. When all is well, individual remuneration suits the executives. But when things go wrong, it also seems normal for them to change the rules in their favor.
“This type of increase gives employees a sense of security and fairness. Including executives”, insists Khalil Aït-Moouloud, director of the compensation survey activity at WTW. They are actually safer to get something. And above all, a permanent sum.
Employees, and even executives, say to themselves that it is better to pocket a less expensive general increase than a hypothetical individual increase. We find this phenomenon in particular among salespeople.
Franck Chéron, human capital consulting partner at Deloitte.
5- Annual objectives more difficult to achieve
If we add to this the sometimes increased difficulties for executives to achieve their annual objectives, we understand better that a majority of executives are pleading in favor of collective increases rather than individual ones.
6- First-level executives victims of a mechanical crushing of wages
We are witnessing a crushing of salaries between non-executives and first-level executives. The former benefited from the triple boost in favor of the minimum wage in 2022 (+7.76% between August 2021 and 2022) while the latter may not have been increased for one or two years. In view of inflation, in net-net, their salary has therefore mechanically fallen even more than that of non-executives. For these entry-level executives, general raises are clearly a pressing demand.