Increasing levels of increase
” The volume of the base salary increase envelope planned for 2022 is established at a median level of 2.8% (against 1.41% in 2021 and 2% in 2020)”, immediately warns the 10th edition of the 2021-2022 survey on mandatory annual negotiations (NAO) signed Mercer. On average, we should be at 2.73%.
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Executives are not the first to be served by increases
On closer inspection, not all employees are in the same boat. “Executives are not forgotten by companies, but they are not necessarily among the first augmented employees. In a context of renewed inflation, companies are first increasing low wages more »observes Charles-Antoine Roger, director of HR consulting and transformation activities at Mercer France.
Executives almost excluded from general increases
According to the Mercer survey, executives benefit marginally from general raises. “We favored the purchasing power of the first levels by decreasing general increases”, testifies a French remuneration manager in the distribution sector.
But executives at the forefront of individual increases
In 2022, a very special effort on individual increases was granted to employees not affected by collective increases. This increase is 2.5 times greater than those observed in previous years.
Charles Antoine Roger
“For these individual increases, employers maintain a certain selectivity which benefits executives. But to more and more executives. And especially the first-level managers. The double reassessment of the minimum wage in 2022 indirectly impacts the salaries of these executives. Their remuneration tends to be closer to that of employees,” analyzes Charles-Antoine Roger.
The companies therefore reacted by granting them individual merit increases. ” We observe an increasingly large share attributed to merit and a relative stability with regard to promotions. That is mainly explained by the problem of retention talent that is becoming a priority for many” We observe an increasingly large share attributed to merit and a relative stability with regard to promotions. That is mainly explained by the problem of retention talent that is becoming a priority for many companies”, says this expert.
Executives receiving other benefits
Similar to last year, two-thirds of companies are using NAOs to negotiate items other than base salary increases. These increasingly varied initiatives continue to represent an important element of the negotiations. “Employers seek to saturate tax and social security measures in order to optimize their social charges. If they have not reached their exemption ceiling for restaurant vouchers, they are now working on it. They also use the sustainable mobility package, soon the possible buy-back of RTT days and the value-sharing bonus”observes Charles-Antoine Roger.
In terms of supplementary pensions, they widen the scope of beneficiaries, for example, by reducing the seniority criteria. “They are also revising upwards the share of the employer contribution on these additional benefits. The employer’s contribution is not taxable and that of the manager will be deducted from his tax base on income. It is a tax advantage and a way for executives to build up savings for their retirement., he illustrates to conclude. Managers are therefore not losers all along the line!
Mercer NAO Study Methodology 10th edition (downloadable full report)
For the 10th edition of the NAO survey, Mercer interviewed a panel of 45 HR managers and compensation and benefits managers over a period from October 2021 to March 2022, through an online questionnaire and individual interviews.
