Employers are satisfied with their compensation packages — do employees agree?

Compensation continues to be one of the most important aspects of any successful workplace, and emerging trends around pay transparency and salary increases are shedding light on what the future holds for employees. 

Half of companies rated their overall compensation package as above average, according to exclusive research from EBN's 2024 compensation research report, which sought to explore current compensation trends and highlight best practices for adapting to market shifts. This is significantly higher than satisfaction around other competitive offerings, such as healthcare benefits and paid vacation.

As for how companies are determining the makeup of their compensation packages, 82% cited external benchmarking, 79% took into account an employee's experience, 76% listed budget constraints and 60% said salary bands determined their pay and benefits strategy. 

Read more: Over 80% of employers plan on giving their benefits an upgrade in the next year

As external benchmarking was the most popular strategy when determining compensation, 80% referenced similar roles in their geographic area. Among employers who use salary bands to determine compensation, 70% had bands for all positions at their company.

Transparency is key to successful compensation

Employers were also conscious of being transparent around how they make these decisions. As one respondent shared with EBN, "Transparency has been part of our organization since I joined over 10 years ago. Today, it is part of the culture and continues to keep our employees engaged and with a far better retention than others." 

Check out EBN's full special report on navigating compensation in 2024:

• Employers are satisfied with their compensation packages — do employees agree?
• 4 benefits that make your compensation package competitive in 2024
• This COO shares how women can be smarter negotiators and get paid more
• 3 leaders reveal their salaries — and how they earned them

As salary transparency continues to be highly prioritized, and often legally mandated, 70% of employers already post salaries on their job listings, even when it's not required by law, and of employers who post salaries on job listings, three-quarters say there's room for negotiation beyond what's listed.

Read more: Promotions are harder to come by and it's stunting entry-level workers

Eighty percent say pay at their company is mostly or totally equitable and another 80% of employers have reviewed pay across the organization for equity within the past 24 months. It's paying off: One-third of employers said a move towards salary transparency has changed their compensation discussions with current employees.

"As HR director, I have had discussions with our departments on how salary is viewed by both potential employees and current employees and that is why we made the decision to have a compensation study completed and implement a written compensation policy and philosophy statement," an HR leader from the government and municipalities sector shared in the EBN survey. "The general feedback we have received has been very welcoming of the changes we are making." 

Addressing raises in a challenging economic environment

As for how they handle those negotiations around raises and promotions, EBN's data found that employers used a variety of similar strategies to determine an appropriate wage range. Most employers have issued or will issue raises in 2024, the report found, and the majority of those boosts — 90% — are based on performance. About half of the raises given also address title shifts and cost of living (COL) increases.

Read more: 10 best and worst companies for entry level employees

Sixty percent of employers have raised starting salaries due to inflation and many have increased raise amounts. Less than half have had to make workforce cuts to account for those adjustments. 

Yet economic pressures continue to be a factor when it comes to compensation, and half of employers said their wages are still failing to keep pace with inflation. Much of that has to do with the fact that 64% of HR teams admit that it's been hard to balance competitive wages with budget constraints. And employers admit they can do better, especially when it comes to communication around their approach. 

"We don't discourage employees from discussing salaries, but I think we could do better," an HR leader in the healthcare industry shared with EBN. "There are some that get large bonuses just due to a title. I think we need to do better across the board."