2023 Structure Adjustments
By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published November 15, 2022
Most compensation systems include a market-based compensation structure. The compensation structure contains several pay grades, each identifying the minimum, midpoint, and maximum pay rate for each grade.
The compensation structure must be maintained and adjusted regularly. Compensation structure adjustments keep the structure competitive with the external labor market, especially in the years between comprehensive market studies.
For those organizations that manage their compensation programs on a calendar year, now is the time when data is collected, and decisions are made regarding compensation structure adjustments for the upcoming year.
HR Source structure adjustment recommendations are compiled using data from employer surveys of compensation practices. As always, HR Source has gathered and analyzed data from both internal and external sources to provide the following general industry structure adjustment recommendations for 2023:
- Compensation structures specifically covering production, service, and maintenance positions: 2.6% increase.
- Compensation structures specifically covering non-exempt office and technical positions: 2.7% increase.
- Compensation structures specifically covering exempt professional and managerial positions: 2.7% increase.
- Compensation structures including two or more of the previously identified groups: 2.7% increase.
Because HR Source collects, analyzes, and publishes select industry-specific compensation surveys, we are also able to share 2023 structure adjustment recommendations for the following industries:
- Non-Profit Organizations: 2.3% increase
- Public Libraries: 2.65% increase
- Park and Recreation Agencies: 2.5% increase
Structure adjustments are a perfectly acceptable and recommended pay practice, but they have a critical flaw; structure adjustments assume that all jobs in a particular structure are increasing at the same rate in the market. Currently, employers are still in a tight competitive market for talent, dealing with significant minimum wage increases, and coping with a high level of inflation. As such, employers should be aware that formal benchmarking may need to be performed more frequently. If you are concerned about your compensation structure being aligned with the current market, please contact the Compensation Department at 800-448-4584 to speak with one of our professionals or email us at info@hrsource.org.