2020 was an unprecedented year. PayScale’s Compensation Best Practices Report is the largest and most robust resource available to help organizations understand how other employers reacted to 2020 as well as what the trends are for compensation and total rewards going into 2021 and beyond.
The transformative shifts taking place in business are bigger than the COVID-19 pandemic. A changing economy, the rise of remote work, calls for diversity, equity and inclusion, new laws around pay transparency, and the expectations that workers have for employment opportunities are all reshaping people strategy, which includes compensation. The impact of 2020 on the employee experience is creating waves that will result in a sea change over time.
The question is what is important now? According to our data, the biggest themes include reductions in base pay increases and total compensation and their impact on income inequality, a growing focus on compensation strategy, higher investment in pay equity analysis to close pay gaps, and the importance of paid market data and transparency in driving compensation strategy and enabling shifts to accommodate changing conditions and expectations.
In summary, organizations who are serious about being competitive when it comes to talent will need to invest in mature compensation management solutions and pay communication strategies in 2021.
Note: PayScale’s Compensation Best Practices Survey is able to provide cuts of the data for certain questions with segmented data available for the United States vs. Canada, Company Size, Industry, and Top Performing organizations. See Methodology for more information.