Compensation is what binds employees and employers together and underpins our understanding of work as a means to prosper. But would you accept Bitcoin as payment for work or are you feeling more confident to ask for a raise now that 2020 is behind us?
Coronavirus has disrupted conventional attitudes to work, the workplace and raised questions about employee remuneration. Many have faced fundamental changes to the way they work. While remote working might offer a welcome break to the daily commute, it demands that workers become familiar with new technology.
We recently surveyed more than 2,200 people from the US, Canada and the UK to explore pandemic-related trends in compensation. We asked people what they felt about executive pay, what pay hike would motivate people to look for a new job and is cryptocurrency the new paycheck.
Compensation can arrive as a cash payment at the end of a shift, or via a best-in-class EOR global payroll, which simplifies the process for all. 2020 exposed the critical importance of compensation for workers.
Pandemic Pay Changes
We began by asking people about changes to their compensation in 2020, which was a year when the global economy was upended by coronavirus and shook many industries to their core.
As many as 65% of Americans we surveyed say their income either stayed the same or fell in 2020. Of those who said it decreased, the number one reason was that they took a pay cut, as opposed to losing their job. Around 55% of Americans who had their pay cut during the pandemic say it has not returned to normal levels. That rises to 59% in Canada, while in the UK it’s 52%.
Britons were more likely to see their pay cut than to fall into unemployment. The number of people who took in less income because of a job loss was almost twice as high in the US and Canada (29% and 28%, respectively) as it was in the UK (17%).
During the pandemic, many businesses put freezes on raises and bonuses. The UK led the way with 53% of their respondents saying they were affected by such freezes, while in both the US and Canada, 46% reported the same.
A Brighter Future
While 2020 was a tough year, people are hopeful for a healthy rebound in 2021. Across the three countries surveyed, 50% of respondents expect to make more money than last year, 30% expect to make at least the same amount, and only 20% expect to make less.
Along with that optimism, the general population is also warming to one of the top fintech trends, cryptocurrency.
In 2020, NFL player Russel Okung made headlines when he negotiated half of his salary in Bitcoin. So we asked our respondents if they’d do the same. In the US, 37% of people are open to the idea, despite the cryptocurrency’s notorious volatility. In the UK and Canada, the interest is even greater – 50% and 40% would accept some of their pay in Bitcoin, respectively.
Given trends in remote work, we also asked people if they feel they should benefit from some of the inevitable savings companies will enjoy by not having to host full workforces on-site, as they have in the past. In the US and Canada, 60% said yes, while 66% of British respondents agreed. In any case, it will be interesting to see how companies innovate to attract and incentivize remote workers with various perks and compensation agreements.
Given the bullishness on 2021 earnings, we asked people what they will do with any unexpected extra income in the future; the most common answer: put it in savings. We also asked what percent raise would compel people to leave their current job; 20-25% seems to be the sweet spot. People living in the UK and Canada were notably more likely to say they would put extra money towards savings (58%), compared with Americans (48%).
Sharing Information About Income
We asked respondents to tell us who from their inner circle knows how much money they make. Surprisingly, it seems people are quite open on the subject. For example, 70% of Americans said some or all of their friends know what they make and 65% said the same of co-workers. The numbers were slightly higher in the UK and Canada.
Naturally, such information is frequently shared in romantic relationships; 83% of Americans say their significant other knows what they make. Interestingly, 63% of Americans say they could hypothetically be in a relationship where they don’t know what their partner makes. For what it’s worth, men were more likely to say that than women (70% versus 56%), and residents of the UK were more likely to say that compared with Canadians (69% versus 57%).
Sometimes it seems we care as much about what other people earn as we do. Certainly, a lot of focus is directed upward, at managers, CEOs and company owners.
When Americans were asked if they understand why senior members in their organizations are paid as much as they’re paid, 69% said yes–it makes sense, it’s justified. In the UK, that dropped to 65%, and in Canada to 56%.
Just over half of people across the three countries (55%) say they know what their boss makes, whether it’s the exact number or an approximation. Of those people, 35% think their boss is overpaid.
The percentage of people suggesting that some are overpaid rose significantly when we asked about compensation for CEOs and company owners. In America, 55% say the CEO or owner of their company is overpaid, while it’s 61% in the UK and 68% in Canada.
We asked people how many times they’ve discussed compensation with their employer over the previous 24 months. From those surveyed, 29% said they’ve had zero communication in two years. An additional 51% have talked about it 1-2 times in two years, and 20% have talked about it three or more times over that same period. These numbers were consistent across the three countries surveyed.
Like going to the dentist and public speaking, salary negotiation is known to cause feelings of anxiety. Sometimes it helps to have a good resource on your side as you navigate a tough negotiation. We asked respondents who in their lives they’ve sought out for such support.
Between February 1 – 14, 2021, we surveyed 1,545 Americans, 386 Canadians, and 355 residents of the United Kingdom (UK) on the subject of compensation. The gender of our respondents was 50 percent female and 50 percent male, with an average age of 37 years old and an age range of 18 to 70 years old.
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About Elements Global Services:
Elements Global Services is an award-winning HR technology & services company. Elements provides employment solutions in over 135 countries – covering everything from payroll, benefits, HR, local compliance to visa & mobility. Headquartered in Barcelona, Spain, Elements has a global network of offices and employees delivering innovative solutions to its growing customer base. Elements’ Direct Employer of Record model helps companies expand, onboard, manage & pay employees worldwide. Visit www.elementsgs.com, LinkedIn or Twitter for more information.