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01/09/2024 - Meeting Materials 1/8/24,2:41 PM Mercer QuickPulseTM-US Compensation Planning Survey 12024 Projections Projected salary increase budgets holding, for now Results of the 2023 Mercer QuickPulseTM - US Compensation Planning Survey 0 0 0 0 December 04, 2023 Blog Home Here we are! It's the end of 2023 and we have one more look at what employers are forecasting for salary increase budgets for 2024. In addition, we have insights to share on promotions, off-cycle increases, salary structure adjustments, and some hot topics, such as pay transparency. Take a peek and see how this stacks up with what you are planning for next year. Merit and total increase budgets Both merit and total increase budgets are relatively unchanged from the last time we conducted the US Compensation Planning survey in August of this year. On average, the more than 900 participants in the US are forecasting 3.5% merit increase budgets and 3.8%total increase budgets. Only the total increase budget changed from earlier in the year, decreasing from 3.9%. When comparing industries, there are some differences. Healthcare continues to project increase budgets that are below the average, at 3.1%for merit increases. Those industries projecting above the overall average are Insurance/Reinsurance and Services (Non-financial), at 3.7%for merit increases. With 49% of companies still reporting that their budget status is "preliminary," it's quite possible that we could see actual increases lower than projected when we survey again in Q1 of 2024. What's important is that you take this information, along with other reputable sources, and determine what's right for your company. Your annual increase budget should make sense for your industry, desired competitive positioning, financial outlook, etc.Additionally, ensure that your budget includes funds for any adjustments needed to realign particular jobs or employees to mitigate pay compression or any necessary market adjustments. Manager discretion for merit distribution A question that comes up from time to time, particularly when you are revising your total rewards strategy, is"How much discretion should managers have when it comes to delivering merit increases?" or other pay adjustments. To take a pulse check on where employers are with empowering managers to make pay decisions, we asked, "What limitations or rules do managers have when it comes to the determination of an individual's base salary increase?" It seems that the most prevalent rules that managers must work within: • Fall within the overall budget • Fall within the salary range • Fall into a recommended range provided based on select factors (e.g., position in range and performance) • Incorporate increases determined by compensation (e.g., market adjustments or pay equity adjustments) • Not exceed designated caps for pay increase On the other hand, 1% of companies (about 9) said that they allow managers ultimate discretion when it comes to the increase, with no limitations.Another group of respondents said that"everyone receives the same increase" (about 3%) and others stated that merit increases were formulaic(about 6%). https://www.imercer.com/articlei nsig hts/projected-sa lary-i ncrease-budgets-holding 1/5 1/8/24,2:41 PM Mercer QuickPulseTM-US Compensation Planning Survey 12024 Projections How does that compare to the annual increase guidelines you are providing for your managers? Perhaps with more education and confidence to talk about pay_, your managers could be given more discretion. Promotion practices Although not much has changed recently in promotion practices, it warrants consideration because promotions and career development play such a significant role in the employee experience and total rewards strategy. Employers on average are planning to promote a little less than 10% of their workforce in 2024. On average, employees can expect to see a 9.2% pay increase for a one-level promotion. Half of employers are managing promotions through their existing salary and wages budget, or some other expense process. Just under 1 in 4 companies have a standalone promotion budget and are planning an average of 1.1% to cover the increase in salaries due to promotions. Off-cycle increases As we've seen in the last couple of compensation planning reports, employers' use of off-cycle increases has slowed, but not disappeared. Per capita base salary changes, found by comparing the average per person base salary change over a period of time, shows that pay has moved on average 4.6%, which is larger than what was reported as the actual increase delivered in March of 2023: 3.8% merit and 4.1%total increases. Approximately half of employers reported that they have provided or will provide off-cycle increases in 2023, citing retention concerns, internal equity, and market adjustments as the most common reasons for doing so. While two-thirds of companies don't budget for off-cycle increases, most do have an extensive approval process that typically involves several levels of line management as well as Human Resources and Compensation. Salary structures For the 87% of employers who utilize a formal salary structure, 3 out of 4 adjust the structures annually.Another 8% adjust them every 2 years. Of those who plan to adjust their structure in 2024, the average projected salary structure increase is 2.9%. Sharing salary ranges We know that employers are having to be more transparent about their pay levels, whether because they are required by law or as a voluntary act to build trust among employees. Beyond where legally required, 28% of employers are including salary ranges in job postings nationally with another 10% planning to do so. But what exactly are they sharing? If you take a look at job posting boards like Indeed, it's obvious that what's being shared is not consistent. When looking at a particular job, what's shared as the pay range varies widely. Employers in the US Compensation Planning Survey reported that they most commonly are using the following in job postings: • National, market-based pay range, regardless of (job) location • Geographically adjusted pay range, based on location of job posting • Subset of the pay range (e.g., do not disclose the full maximum of the salary range) Addressing compression and internal equity Increased pressure to be more transparent about pay means that employers have to prioritize addressing pay compression and internal equity issues. Only 17% of the 951 survey respondents reported that they have not experienced compression or internal equity issues; another 18% stated they"don't know" or are "unsure."The remaining respondents stated that they have done the analysis and are making adjustments (36%), that they will make adjustments outside the annual increase cycle (11%), or that they plan to address in 2024 (17%). Timely insights direct to you Does any of this come as a surprise to you? Or, perhaps it differs dramatically from what your organization is planning for 2024?As you know, what's important is that you understand what your competitors are doing and then make decisions that are right for your unique circumstances. Sign up today to be notified when the next Compensation Planning Survey opens—participants receive the results at no cost. Looking for other Mercer insights to help you plan for 2024? Give us a call at 855-286-5302 or email one of our associates at surveys@mercer.com. https://www.imercer.com/articleinsights/projected-salary-increase-budgets-holding 2/5 1/8/24,2:41 PM Mercer QuickPulseTM-US Compensation Planning Survey 12024 Projections Mercer welcome to brighter Plann 'ing It for 2024 AnnUal and off cycle increases along with pay transparency , 2023 Mercer QuickPulse-1—US Compensation Planning Survey All LroeJ Increase projections are holding Merit Total increase 4A% 3.8% 3.8% 3.9% 3.8% 3.4% 3.5% 3.5% 2022 2023 2024 2024 Actual increases Actualincreases Projected Projected August November 0 Just over provide off-cycle increases reasonsPrimary • off-cycle Market adjustments Retention concerns 81% To counter offers from competitors Internal equity 71% Competitive Companies are sharing ranges in job postings Onnrnnrh to nnctinn calary rannac nn inh nnctinnc https://www.imercer.com/articleinsights/projected-salary-increase-budgets-holding 3/5 1/8/24,2:41 PM Mercer QuickPulseTM-US Compensation Planning Survey 12024 Projections %of Organizations Only where legally required 4, Not legally required,no 8% intention Don't know/Unsure 9% Including nationally Planning to Include nationally -0— What they share differs Approach to determining the salary range to be included on external job postings %of Organizations Geographically adjusted pay range, 27°/ based on location of job posting ° National market-based pay range, 24°/ regardless of location ° Subset of the pay range(e.g.,do not disclose the full maximum of 22% the salary range) Budgeted hiring range _ 10% Minimum of lowest geographic range to maximum of highest 6% geographic range Actual incumbent pay ranges ■ 4% Other = 6% n=981 All numbers are averages and include zeros unless otherwise noted. 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In the US, 1-800-866-7474. ©2024 Mercer LLC,All Rights Reserved https://www.imercer.com/articleinsights/projected-salary-increase-budgets-holding 5/5 ECONOMIC INDICATORS FOR UTAH AND THE UNITED STATES:OCTOBER 2023 October 23 2021 2022 2023 2024 2025 PERCENT CHANGE ECONOMIC INDICATORS UNITS ACTUAL ACTUAL ESTIMATE FORECAST FORECAST 2022 2023 2024 2025 PRODUCTION AND SPENDING U.S.Real Gross Domestic Product Billion Chained$2017 21,408 21,822 22,364 22,724 23,007 1.9 2.5 1.6 1.2 U.S.Real Personal Consumption Billion Chained$2017 14,718 15,091 15,431 15,702 15,942 2.5 2.3 1.8 1.5 U.S.Real Private Fixed Investment Billion Chained$2017 3,887 3,940 3,958 4,004 4,064 1.4 0.5 1.2 1.5 U.S.Real Federal Defense Spending Billion Chained$2017 823 800 821 831 835 -2.8 2.7 1.2 0.4 U.S.Real Exports Billion Chained$2017 2,281 2,440 2,515 2,601 2,693 7.0 3.1 3.4 3.5 Utah Real Gross Domestic Product Million Chained$2017 209,975 213,898 220,107 225,069 229,912 1.9 2.9 2.3 2.2 Utah Exports Million Dollars 18,060 16,542 18,106 19,404 20,241 -8.4 9.4 7.2 4.3 Utah Coal Production Million Tons 12.5 10.7 8.0 10.5 10.0 -14.5 -25.4 31.3 -4.8 Utah Crude Oil Production Million Barrels 35.8 45.4 47.5 49.0 51.0 26.9 4.6 3.2 4.1 Utah Natural Gas Production Sales Billion Cubic Feet 198 216 227 239 248 9.1 5.1 5.5 3.4 Utah Copper Mined Production Million Pounds 351 397 420 450 430 13.1 5.8 7.1 -4.4 SALES AND CONSTRUCTION U.S.New Auto and Truck Sales Millions 14.9 13.8 15.4 15.7 16.5 -8.0 12.1 1.6 5.2 U.S.Housing Starts Millions 1.6 1.6 1.4 1.4 1.4 -3.4 -9.7 -1.1 1.4 U.S.Private Residential Investment Billion Dollars 1,126 1,166 1,067 1,093 1,164 3.6 -8.5 2.5 6.5 U.S.Nonresidential Structures Billion Dollars 624 700 827 843 856 12.3 18.0 2.0 1.5 U.S.Home Price Index(FHFA) 1991Q1=100 338 386 403 413 420 14.0 4.6 2.4 1.8 U.S.Nontaxable&Taxable Retail Sales Billion Dollars 7,356 8,073 8,322 8,504 8,648 9.7 3.1 2.2 1.7 Utah New Auto and Truck Sales Thousands 131 129 139 145 155 -1.6 8.1 4.3 6.3 Utah Dwelling Permitted Units Units 40,144 29,883 19,000 19,000 22,000 -25.6 -36.4 0.0 15.8 Utah Residential Permit Value Million Dollars 8,850 7,122 4,500 4,600 5,300 -19.5 -36.8 2.2 15.2 Utah Nonresidential Permit Value Million Dollars 2,930 3,694 2,600 2,200 2,400 26.0 -29.6 -15.4 9.1 Utah Additions,Alterations and Repairs Million Dollars 1,935 1,914 1,450 1,300 1,500 -1.1 -24.2 -10.3 15.4 Utah Home Price Index(FHFA) 1980Q1=100 662 790 779 775 784 19.4 -1.3 -0.6 1.2 Utah Taxable Retail Sales Million Dollars 49,729 53,797 53,570 55,160 57,240 82 -0.4 3.0 3.8 Utah All Taxable Sales Million Dollars 90,105 100,893 103,034 106,899 110,977 12.0 2.1 3.8 3.8 DEMOGRAPHICS AND SENTIMENT U.S.July 1st Population Millions 332 334 336 337 339 0.4 0.5 0.5 0.5 U.S.Consumer Sentiment(U of M) Diffusion Index 77.6 59.0 67.6 81.0 88.3 -24.0 14.6 19.7 9.1 Utah July 1st Population Thousands 3,339 3,381 3,428 3,471 3,511 12 1.4 1.3 1.2 Utah Net Migration Thousands 31.6 18.6 22.8 19.4 17.2 PROFITS AND RESOURCE PRICES U.S.Corporate Before Tax Profits Billion Dollars 2,923 3,209 3,223 3,134 3,062 9.8 0.4 -2.8 -2.3 West Texas Intermediate Crude Oil $Per Barrel 68 95 79 82 78 39.4 -16.6 3.2 -4.0 U.S.Coal Producer Price Index 1982=100 189 280 265 214 202 47.5 -5.1 -19.5 -5.3 Utah Coal Prices $Per Short Ton 38.4 47.9 43.5 39.0 38.0 24.6 -9.1 -10.3 -2.6 Utah Oil Prices $Per Barrel 60.6 80.8 68.0 73.0 68.0 33.4 -15.9 7.4 -6.8 Utah Natural Gas Prices $Per MCF 4.10 7.07 4.50 3.20 3.50 72.4 -36.4 -28.9 9.4 Utah Copper Prices $Per Pound 4.25 3.80 3.60 3.70 3.40 -10.6 -5.3 2.8 -8.1 INFLATION AND INTEREST RATES U.S.CPI Urban Consumers(BLS) 1982-84=100 271.0 292.6 304.6 311.9 318.9 8.0 4.1 2.4 2.2 U.S.GDP Chained Price Index(BEA) 2017=100 1102 118.0 122.2 125.1 128.0 7.1 3.5 2.4 2.4 S&P 500 Index 4,267 4,101 4,211 3,901 3,935 -3.9 2.7 -7.4 0.9 U.S.Federal Funds Rate(FRB) Effective Rate 0.1 1.7 5.0 5.4 4.1 U.S.3-Month Treasury Bills(FRB) Discount Rate 0.0 2.0 5.1 5.2 3.7 U.S.10-Year Treasury Notes(FRB) Yield(%) 1.4 3.0 4.0 4.1 3.5 30 Year Mortgage Rate(FHLMC) Percent 3.0 5.4 69 6.7 5.6 EMPLOYMENT AND WAGES U.S.Establishment Employment(BLS) Millions 146 153 156 157 157 4.3 2.4 0.7 -0.3 U.S.Average Annual Pay(BEA) Dollars 70,499 72,832 75,710 78,841 82,088 3.3 4.0 4.1 4.1 U.S.Total Wages&Salaries(BEA) Billion Dollars 10,313 11,116 11,829 12,401 12,876 7.8 6.4 4.8 3.8 Utah Nonagricultural Employment(DWS) Thousands 1,617 1,685 1,727 1,759 1,781 42 2.5 1.8 1.3 Utah Average Annual Pay(DWS) Dollars 56,930 60,408 63,101 65,283 67,549 6.1 4.5 3.5 3.5 Utah Total Nonagriculture Wages(DWS) Million Dollars 92,040 101,800 108,990 114,800 120,300 10.6 7.1 5.3 4.8 INCOME AND UNEMPLOYMENT U.S.Personal Income(BEA) Billion Dollars 21,408 21,841 22,992 24,137 25,306 2.0 5.3 5.0 4.8 U.S.Unemployment Rate(BLS) Percent 5.4 3.6 3.6 3.8 4.4 Utah Personal Income(BEA) Million Dollars 190,468 201,012 213,944 225,814 237,832 5.5 6.4 5.5 5.3 Utah Unemployment Rate(DWS) Percent 2.7 2.3 2.6 2.9 3.5 Sources:State of Utah Revenue Assumptions Working Group,Moody's Analytics,and S&P Global. 1/8/24,2:43 PM U.S.pay raises to remain high 2024 WTW survey finds-WTW PRESS RELEASE (HTTPS://WWW.WTWCO.COM/EN-US/INSIGHTS/ALL- INSIGHTS#SORT=%40FDATE13762%20DESCENDING&F:@ARTICLEZ45XCONTENTZ45XTYPE= [PRESS%20RE LEASE]) U.S. pay raises to remain high in 2024, WTW survey December 7, 2023 Concerns over economic uncertainty not deterring employers from increasing pay ARLINGTON,VA, December 7, 2023— U.S. employers are planning an overall average salary increase of 4.0% for 2024. That's according to the latest Salary Budget Planning Survey by WTW(NASDAQ: WTW), a leading global advisory, broking and solutions company. Though down from the actual average increase of 4.4% in 2023, the numbers remain well above the 3.1% salary increase budget in 2021 and years prior. Inflationary pressures (55%) and concerns over a tight labor market(52%) are the primary influencing factors behind salary increase budgets, both cited by over half of employers surveyed. 44 Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor." Hatti Johannsson I Research Director, Reward, Data and Intelligence, WTW Yet, inflation is slowing down from the highs of recent years, and the labor market is shifting, with voluntary turnover and attrition at 11% overall. While still a common concern, fewer organizations are reporting issues with attraction and retention, down from 60% in 2022 to 48% currently. "We are seeing healthy salary increases forecasted for 2024," said Hatti Johannsson, research director, Reward, Data and Intelligence, WTW. "Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor.At the same time, organizations should remember pay levels are difficult to reduce if markets deteriorate. It's best to avoid basing decisions that will have long- term implications on their organization on temporary economic conditions." Still, employers seek to strike a healthy balance within their total rewards packages. Non-monetary actions are a big focus for employers looking to attract and retain.At most organizations, these include more workplace flexibility (63%); broader emphasis on diversity, equity and inclusion (60%); and improving the employee experience (55%).Additionally, most employers have committed to hiring staff in a higher salary range (55%), undertaking compensation reviews of specific employee groups (54%)and raising starting salary ranges (49%), which could also be seen as a reflection of the increased emphasis on pay transparency. hftps://www.wtwco.com/en-us/news/2023/12/as-economic-uncertainty-looms-pay-rises-remain-high 1/3 1/8/24,2:43 PM U.S.pay raises to remain high 2024 WTW survey finds-WTW 49 Improving the pay conversation goes a long way in improving the overall employee experience and further stabilizing the workforce." Sara Vallas I Senior Director, Employee Experience, WTW Organizations also report moving toward greater work flexibility, as over half(55%) of employers offer a choice of remote, onsite or hybrid working, while 31% offer a flexible work schedule.As this trend grows, some companies are changing rewards in line with remote working: 13% of employers have taken action or are planning to change allowances, 10% of employers have or are planning to change benefits, and 11% have or are planning to adjust base pay. "With ongoing uncertainty, especially around pay transparency, we see organizations do better where there is a foundational level of understanding among all employees—on the compensation philosophy, the program design and how decisions about pay are made. Compensation is a sensitive topic and often managers feel uneasy when it comes to talking about pay. Our research shows the most commonly cited barrier to organizations communicating more openly about pay is the fear of employee reactions. We recommend training for managers on their role, how the compensation program works, and how to communicate it effectively. Improving the pay conversation goes a long way in improving the overall employee experience and further stabilizing the workforce," said Sara Vallas, senior director, Employee Experience, WTW. About the survey The Salary Budget Planning Report is compiled by WTW's Reward Data Intelligence practice. The survey was conducted in December 2023. Over 33,000 responses were received from companies covering over 150 countries worldwide. About WTW At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Media contacts Ileana Feoli Public Relations, Health Wealth & Career, North America 0 Email (mai Ito:ileana.feoli@wtwco.com) +1 212 309 5504 (tel:+1 212 309 5504) Stacy Bronstein 0 Email (mailto:stacy.bronstein@wtwco.com) Related products PRODUCT Salary Surveys Compete for and keep the talent you need with world-class salary surveys and salary benchmarking data across industries, countries and job levels. Getting compensation right is hard. We make it easy. Product Information -+ (https://www.wtwco.com/en-us/solutions/products/salary-surveys) hftps://www.wtwco.com/en-us/news/2023/12/as-economic-uncertainty-looms-pay-rises-remain-high 2/3 1/8/24,2:43 PM U.S.pay raises to remain high 2024 WTW survey finds-WTW PRODUCT Global salary and employee benefits market practice reports Make informed workforce decisions with data from our extensive library of market practice reports, no participation required. Product Information -+ (https://www.wtwco.com/en-us/solutions/products/global-salary-and-employee-benefits-market-practice-reports) Related insights See all insights -+ (/en-us/insights/all-insights) Copyright©2023 WTW.All rights reserved. https://www.wtwco.com/en-us/news/2023/12/as-economic-uncertainty-looms-pay-rises-remain-high 3/3 1/9/24, 10:02 AM The Utah Job Demand Buffer Job Search(/jobseeker/index.html) Employers(/employer/index.html) Assistance(/assistance/index.html) The Utah Job Demand Buffer (/blog/post/2023/12/26/the-utah- job-demand-buffer) ®26. December 2023 By Gwen Kervin Since March of 2022,the Federal Reserve has been raising interest rates in an attempt to cool inflation and slow the economy. However, so far,the effect on Utah's labor market has been minimal. Constricted labor markets following the COVID pandemic caused employers to have a hard time filling open positions. Because employers struggled to find workers, a large gap developed in unmet labor demand. This elevated wages,which in turn lured marginal workers into the labor force, helping to fill some of the vacancies. While Utah continues to turn in job growth numbers,growth rates have come down from the highs experienced in 2021 and 2022, resulting in a reduction in the unmet labor gap. Because of this, any additional Fed rate moves could have a more immediate influence on the Utah labor market going forward. To understand the magnitude of the job buffer created by unmet Utah labor demand, it is helpful to look at the ratio of job openings to unemployed workers.The correlation between the two provides a proxy for how much labor is or isn't available to fill job vacancies. In weak economies,there can be more idled workers than the volume of job postings. Conversely, in strong economies, there are more job postings than available workers.A balance between the two would be an economy with one available worker per job advertisement. However, when the volume of job openings noticeably exceeds the measure of available labor(the unemployed), it can serve as a signal that the labor supply internally is not sizable enough to support job growth. For example, in the early part of 2022, Utah's ratio increased to 3.5.This implies that for every 350 job postings,there are only 100 available unemployed Utah laborers to fill the positions. If there are not enough workers internally to support growth,then attracting labor from outside the state is the needed remedy. Fortunately, Utah has been able to do just that as the state's job growth remained at or above average through 2022 into the early part of 2023. However,as 2023 has progressed, the high ratio of job postings to workers has been moderating. Historically, Utah's vibrant economy has kept this ratio above that of the United States. In fact,the only time that it approached levels near those in the nation was during and immediately following recessions. https://jobs.utah.gov/blog/post/2023/12/26/the-utah-job-demand-buffer#continue 1/6 1/9/24, 10:02 AM The Utah Job Demand Buffer Utah and U.S.: Ratio of Job Openings per Unemployed Worker 3.5 3 2.5 T i 1.5 1 I' g� 25 g § g 25 25 g 8 8 25 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N O 00 {D O N N O 0`0 ID Q N N O 00 �O d N N O CO 10 R rl el 'i -• rl rl rl rl r '- Soo :JOLNM —US —Utah Prior to the pandemic, this ratio was well above that of the United States, but fell closer to levels seen in the rest of the nation in response to the economic pullback tied to COVID-era restrictions. However, soon after,the openings-to-unemployment ratio rose sharply, reaching 3.5 in January 2022.Although the openings-to-unemployment ratio is still at historically elevated levels, indicating elevated labor demand, it is clearly coming down. In July 2023, Utah's job-openings-to-unemployment ratio was at 2.1,which is still noticeably higher than the U.S. rate of 1.5. Job openings can come about either because an employer needs to fill an existing position that has become vacant, or because the employer has decided to create a new position.When employees quit their jobs to move to a new one, it creates churn in the labor market, but does not represent growth in jobs.The number of people quitting their jobs can be used to get an idea of what portion of overall job openings can be attributed to churn versus job growth. In the United States,the number of people quitting their jobs in the pandemic's aftermath increased and stayed elevated.This increase prompted a new catchphrase—The Great Resignation. It is only recently that U.S. quits have returned to levels more in line with pre- pandemic activity. Correspondingly, U.S.job openings also increased during the same period, indicating that a large portion of the overall job openings were due to churn rather than new,job-growth positions. https://jobs.utah.gov/blog/post/2023/12/26/the-utah-job-demand-buffer#continue 2/6 1m/24. 10»2mw The Utah Job Demand Buffer Percent Change in Utah and U.S.Job Openings and Quits from May 2018 120% omm *om aom om 'aom '*nm ...~ � 'uom � 5—JOLTS ---u7o"/,s —urJvbon*n/nu° ......usQuits ......uo Job Open m«p A different picture emerges when looking at quits and job openings in Utah.The level of job openings in Utah increased several years before the pandennic hit. Increased quits were a part of this increase, moving higher at the end of2O17 and reaching apre-pandemic high in the beginning of 2019. Nationally, churn and job growth were mostly flat before the pandemic,with largely little story to tell. Then the pandemic hit and created an instant recession. Recovery began shortly thereafter. Job openings went high in both the nation and Utah in the recovery period. Quits continued to remain low in Utah. On the other hand, quits across the United States began to hao. This largely says that in Utah the post-pandemic job openings increase was fueled more by job growth. Conversely,the national job openings seem fueled more by an overall shortage of labor which created a noticeable amount of labor turnover. Nationally, people were churning in search of better jobs and wages. Recent job growth numbers point to a loosening in Utah's labor market. Monthly job growth estimates have come down from the highs seen in 2021 and 2022. It was in negative territory for most of 2020, but by 2021, it turned positive,with an average growth rate of 5.0%. By 2022, Utah's average job growth rate was 4.2%, still well above historic highs. For comparison, from January 1991 through October 2023. Utah had a 2.7%average job growth rate,which is more in line with the growth m0an seen in 2023.Year to da0a,the atate'o average job growth rate in2.0Y6. Utoh'o tight labor market over the past several years has induced employers to raise wages to attract new workers, and it appears to have worked. Utah's labor force participation rate,which accounts for those over the age of 16 who are either working or looking for wnrk, has hoon in the past year to 09796 in Soptember2023.This is largely a full percentage-point increase in just the past half year. Given the population's age distribution in Utah, a labor force participation rate close to 68.5%would point toa solidly employed labor force. Ayoar ago. in September 2022.the labor force participation rate was at 68.8Y6. 1/9/24, 10:02 AM The Utah Job Demand Buffer Change in Labor Force Participation Among Marginally Attached Workers Utah and the United States:August 2022-August 2023 s.0 4.0 4.1 4.0 30 20 1.4 1.0 0.7 0.2 E 0.0 E - -1.0 -0.7 Age 16-19 Age 65- Female Age 25.44 ■Utah ■r: Wages driven higher by the state's tight labor market have induced marginal workers who typically remain on the sidelines to enter the labor market. Over the past year, groups that have historically seen lower labor force participation rates, including teenagers, older workers, and women with school age children, have been entering the workforce.Younger workers in Utah, between the ages of 16 and 19, have increased their labor force participation rates by 4.0 percentage points,while those over the age of 65 have increased their participation by 1.4 points. By comparison,teens in the U.S. have seen a decline in their participation rates. Older U.S.workers have increased their rates only slightly over the last year, and have yet to recover their participation rates from pre-pandemic levels.Working- age women in Utah, between the ages of 25 and 44,who might have stayed out of the labor force due to childcare needs, have increased their participation rates by 4.1 percentage points compared to U.S.women,who increased their participation rates by only 0.7 points.An overall tighter local labor market in Utah and a faster increase in average hourly earnings over the past year have encouraged higher labor force participation rates among these marginal workers in Utah than in the rest of the United States. While marginal workers have helped to fill vacancies, recent job posting data indicates that employers are scaling back their demand for labor.While several of the industrial sector's job postings remain aggressive in Utah overall,total job postings are down 11.3%from September 2022 to August 2023. Data from Lightcast, a job posting aggregator, indicates that unique online job postings over the last year have declined the most in the professional, scientific and technical services, and administrative support sectors.The educational services and transportation and warehousing industries also saw significant declines in the number of online job postings. Some of these decreases can be attributed to a natural pause in job postings following a dramatic increase in hiring as employers sought to rehire lost workers following the COVID pandemic. For example, both the educational services and professional, scientific and technical services sectors,which have seen a decline in online job postings, saw some of the largest increases in employment from the fourth quarter of 2020 to the first quarter of 2023. https://jobs.utah.gov/blog/post/2023/12/26/the-utah-job-demand-buffer#continue 4/6 1/9/24, 10:02 AM The Utah Job Demand Buffer Percent Change in Unique Online Job Postings in Utah (September 2022 -August 2023) ProfessionjI,Scientific,and Technical Services -38.0% Admin and Support and Waste Mgmt and... -22.9% Educational Services -18.6% Transportation and Warehousing -16.1% Retail Trade -14.8% Real Estate and Rental and Leasing -14.3% Finance and Insurance -12.9% Information -11.9% Wholesale Trade -5.7% Manufacturing -4.3% Health Care and Social Assistance 3.7% Construction 3.9% Accommodation and Food Services 4.4% Public Administration 11.6% Other Services(except Pub Admin) 30.3% rra:T -50.01/.-40.0%-30.0%-20.0%-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Higher wages and spending power have kept demand for services elevated, leading to an increase in job postings in accommodation and food services and other services,which includes repair, maintenance, and personal services.The state's growing population and vibrant economy continue to support the construction sector,which saw a 3.9% increase in job postings over the past year. Finally, the health and social assistance sector,which had a difficult time attracting labor post COVID and will only grow as the population ages, has seen an increase in job postings as well. Tight labor markets in Utah have driven wages higher, luring marginal workers into the labor force, but there is evidence that Federal Reserve rate hikes have begun to loosen labor markets.The job buffer is declining,job postings are down, and job growth numbers have lowered to a more normalized level. However,there is still a healthy demand for workers in the accommodation and food services, construction, and health and social assistance sectors. Going forward,with the jobs gap reduced,the actions of the Fed are likely to have a more immediate impact on labor markets.The effects will have a stronger impact on broader U.S. labor markets,which have a smaller buffer and higher unemployment rates. However, higher interest rates could ultimately slow the Utah economy and soften labor demand going forward. 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(https://www.youtube.com/channel/UCWFTWwPTm (https://www.linked in.com/company/department- of-wo r kfo rce-se ry i ce s) (https://twitter.com/JobsUT) (https://www.facebook.com/Utah.DWS) C I� (https://www.instagram.com/jobsut/) Follow us on our Socials(https://jobs.utah.gov/followus.htmi] Feedback(/jsp/feedback/) I Equal Opportunity(/department/contact/eo.html) I Contact Us(/department/contact/index.html) I Utah.gov Home(http://www.utah.gov) I Terms of Use (http://www.utah.gov/disclaimer.html) I Privacy Policy (http://www.utah.gov/privacypolicy.htm1) I Accessibility Policy(http://www.utah.gov/accessibility.html) ©2024 State of Utah Aproud partner of the leri(-anjobcenter network https://jobs.utah.gov/blog/post/2023/12/26/the-utah-job-demand-buffer#continue 6/6 Inflation, Labor Market Drive Merit Pay Increases for 2024 Workspan Daily December 22, 2023 By Michael J. O'Brien Employee Compensation Key Takeaways • Healthy salary increases. U.S. employers forecast raising their total salary budgets between 3.8% and 4.1% for 2024. • Influencing factors. Inflation and the labor market's voluntary turnover rate may be dropping, but organizations are continuing to use compensation to distinguish themselves from competitors. • Other benefits to consider. Organizations need to take a total rewards focus to look beyond pay to further evaluate what employees value like healthcare and retirement. Inflationary pressures and concerns about a tight labor market continue to cloud the horizon as a trio of surveys point the way forward on 2024 compensation plans. U.S. employers forecast raising their merit increase budgets by 3.5% and total salary increase budgets by 3.8% on average for 2024, according to Mercer's U.S. Compensation Planning Survey November 2023 edition. WorldatWork's "2023-24 Salary Budget Survey" of 2,146 participating organizations found U.S. employers are projecting 4.1% pay increase budgets in 2024 and 3.6% merit increases on average. Meanwhile, employers are planning an overall average salary increase of 4.0% for 2024, according to the latest Salary Budget Planning Survey by WTW. The pressures of the labor market, inflation and uncertainties continue to weigh-in for employers as they head into 2024 with their plans for pay increases, said Alicia Scott-Wears, a compensation content director at WorldatWork. Since the early 2010s, it has been typical to see U.S. salary budget increases in the range of 2.8 to 3.2%, Scott-Wears explained, so a salary budget range of 3.8 to 4.1% is a notable elevation — at average, 32% higher than pre-pandemic standard. "Still, a 4% increase is down from 2023, which saw actuals at 4.4%, so it's a mild pullback, and globally, salary increase budgets are generally stabilizing or pulling back slightly in most cases," she said. While both inflation and the labor market's voluntary turnover rate may actually be dropping, organizations are continuing to use compensation as a main driver to distinguish themselves from competitors. "We are seeing healthy salary increases forecasted for 2024," said Hatti Johansson, research director, reward, data and intelligence, at WTW. "Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor." At the same time, she said, organizations should remember pay levels are difficult to reduce if markets deteriorate. "It's best to avoid basing decisions that will have long-term implications on their organization on temporary economic conditions." Trendspotting While pay growth remains strong for most organizations in the upcoming year, it is starting to slow down, according to Lauren Mason, senior principal, career, at Mercer. "We see that practices that had become the norm over the last two years — such as premiums for new hires and out-of-cycle pay increases — are slowing as well," she said. Companies are becoming more prudent about their compensation spend, she said, as well as focusing on providing market and equity pay adjustments for employees as a result of pay compression or internal equity. The other trend is growth in hourly pay, according to Mercer research. • The median internal minimum wage (a company's lowest wage or starting rate for any position) is now up to $16.70, up from $15.50 in 2022. • Across industries, median internal minimum wages vary, with the lowest rates being seen in retail (median of $13.80, which is notably the only industry below $15/hour), and the highest rate of $19.50 in energy. • Retail also had the fastest growing internal minimum wage (up from $12.20 last year, an increase of 13%). "It's a reflection of the need for retail hourly wages to keep pace," Mason said, "as many employees have transferable skills they can utilize in front-line roles in other higher paying industries such as services, banking or manufacturing." There were no major shifts in 2023 related to pay for performance strategies, Mason said, as the vast majority of employers continue to indicate that they utilize performance as a key factor for differentiating merit awards. However, one "emerging" area of compensation is skill-based pay, which Mason said can provide many benefits, "such as aligning pay strategies to hot skills and rewarding the attainment of new skills." Inflation Frustration How much does inflation affect how organizations plan on using merit pay increases in 2024? Inflation certainly adds more pressure on pay increase budgets, said Mason, but employers view cost of labor as the primary factor when setting budgets. And while there is a strong correlation between the economy and salary budgets, there are many factors that play into pay increases, said WTW's Johansson. "Even as inflation cools, salary increases are — again — above inflation," she said, "due to a healthy job market and successful business performance in many industries." These days, when getting pay right is the absolute minimum requirement, said Johansson, organizations also need to continue to supplement pay with non-monetary elements, like workplace flexibility and focusing on the employee experience. "Companies need to take a total rewards focus to look beyond pay to look at what employees value like health care and retirement," she said. Looking Ahead in 2024 As the labor market and economy continue to stabilize and pay growth gradually moderates, employers should brace themselves for a shift in the compensation landscape next year, said Johansson. "In this environment, it becomes crucial to strategically allocate compensation investments where they are most needed," she said. "This includes prioritizing faster-moving market segments, such as hourly pay, as well as skills that are in high demand." It's also essential to provide market and equity adjustments for employees who may have fallen behind. "With pay transparency on the rise, employers will face mounting pressure to not only explain, but also defend employee pay levels relative to the market and peers," Johansson said. "Navigating these challenges successfully — with tighter budgets — will be key to getting compensation right in 2024." Additionally, top skills and top performers will be a priority for employers in 2024, said WorldatWork's Scott-Wears. "Many employers have been challenged to retain top performing talent, so that may factor into allocations too," she said. "Turnover is reportedly slowing globally, and inflation is easing slightly as well, so thoughtful allocations have the promise of being impactful with employees." Editor's Note: Additional Content For more information and resources related to this article see the pages below, which offer quick access to all WorldatWork content on these topics: About the Author f ; Michael J. O'Brien Freelance Contributor at WorldatWork Michael J. O'Brien is a freelance writer for WorldatWork who has been covering the world of business since 2005.