Grant Thornton: HR Expects Employee Salary Increases

Grant Thornton LLP, a professional services firm, has released a survey that offers insights into how human resources (HR) leaders are responding to the ongoing war for talent.

The survey of 551 senior U.S. HR leaders found 51 percent said their organization expects average merit increases of more than 5 percent. Eighty-eight percent said their company expects average merit increases of more than 3 percent. Meanwhile, 68 percent of HR leaders said their company already has increased the number of employees eligible to receive a cash bonus.

“A majority of survey respondents believe that the war for talent will last more than a year, and it appears that cash will be a major incentive of choice,” said Tim Glowa, a principal and leader of Grant Thornton’s employee listening and human capital services offerings.

But Glowa added that this is not the only way to win the war for talent. In Grant Thornton’s recent State of Work in America survey, which polled more than 1,500 full-time employees of U.S. companies, 51 percent of respondents said they would give up a 10 percent-20 percent salary increase for more flexibility in when and where they work.

And with more adoption of hybrid work arrangements, the HR leaders survey indicated nearly half (46 percent) of the leaders polled said their companies are looking into reducing office space and providing further remote or hybrid work opportunities.

“It’s clear that employees value the flexibility they have had since the start of the pandemic,” said Glowa. “However, not all companies will want or be able to offer 100 percent flexibility. If flexibility is not an option, it is critical to differentiate your value proposition in a meaningful way. Now more than ever, you need an edge over the competition that provides value to your workforce.”

Mike Monahan, Grant Thornton’s national managing principal of People & Community, added it is important for employers to support their workers’ total wellbeing across multiple dimensions — emotional, physical, career, social and financial.

“Today’s benefits must do more than just complement salaries; they must meet employees where they’re at,” said Monahan. “HR leaders must listen to employees and provide flexible offerings that recognize people have different needs at different times in their lives. Employers that support their workers and their families through life’s various stages will be able to retain top talent and stand out in a tight job market.”

According to Grant Thornton’s survey data, 65 percent of HR leaders polled said employee retention over the next 12 months is a key concern, while another 67 percent said they are very concerned about workers who are approaching retirement age and their potential to leave the organization.

“As mature workers consider retirement, and businesses face an increasingly high level of competition for younger talent, it becomes even more crucial to retain your mature workforce,” said Angela Nalwa, an HR Transformation managing director at Grant Thornton. “Companies need mature workers for multiple reasons: Their experience, knowledge and mentoring of younger employees are critical, and there’s not enough talent to replace this segment of the workforce. There needs to be a focus on comprehensive retention strategies for this valuable group.”

Despite the importance of this key demographic, almost a quarter (22 percent) of HR leaders surveyed said they don’t or don’t know if their organization has an effective retention strategy in place for mature talent. However, 47 percent of HR leaders said their organization is beginning to adjust its strategy and retention to account for the mature workforce. Overall, 52 percent of HR leaders said their organization is considering investing in employee retention in the next 12 months, while another 74 percent said their organization has already developed new retention strategies.

To read more about the 2021 Grant Thornton HR leaders survey, visit