So we collect a huge amount of data every year, and we are getting better and better using technology at kind of drawing out the themes from that data. So we're just going to pull out in this section a few of those key themes. So the first one, the number that you've been waiting for, the reason many of you came, so this is the salary budget planning report that was released-- is about to be released in the next few days. And the advanced number, so as you can see, 2022 actual median salary increase was--
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--4.0%. That is higher than in 2021. The 2023 forecast is a median of 5% in the UK, 4% in Ireland. Ireland is a little bit lower, as you can see, but with an upper quartile of around 6%.
And, interestingly, these numbers are significantly higher than they were forecast to be back in July this year. So if we just look-- we've just picked a few sectors here. We can't pick up everybody's sector, of course, but there will be sector cuts from the paper when it comes out.
So financial services generally-- if you keep your eyes to me on the teal blue bars and to the right-- so that's anything above 4% and, in particular, of course, that big bar purple, and you'll see what I mean by that. So that's anything above 4% really, and the pink bar on the far right is anything above 7%, so 7% and above. So you can see for financial services, a significant number of companies expecting to be between 5% and 6%, 5% and 5.9%. That's the 39%, but a big chunk higher than that so a significant number above 4.0%.
If we move to insurance then, you can see what I mean by those bars. We're staying clustered towards the right-hand end, significant numbers still in that purple bar of between 5% and 5.9%. And that stays pretty consistent by sector, so we're now looking at retail. Some lower increases still predicted in retail, which is quite interesting in particular given the increase in the national living wage.
But you can still see the majority of companies clustered towards that top end above 4% and a big number between 5% and 5.9% again. And equally true, this is technology, media, and gaming. So you can see slightly more of a skew down towards the left-hand end but still pretty high. So we are expecting a significant and unprecedented year in terms of salary budgets.
LISA DONALDSON: And with that, a lot of companies are taking a variety of compensation actions. Of course, it's not just base salary increases. But we're seeing 78% doing those for specific employee groups so likely hot skills, hot jobs, hard-to-find talent.
We see organizations hiring people into the top end of the salary range and raising starting salary rates. So you can imagine what that might do to your internal equity and to the existing employees within an organization. We looked at that data. We tried to see what is this new higher premium, if we were to bring in folks that joined within the past two years compared with the existing employees.
And we can see that generally, there's a 4% new higher premium on that professional level role. And you can see that that starts coming in at that P3 or career level, for those of you who know our methodology. So that's starting to command a 6% premium, and that goes up to about 11% at that P5 or your expert level.
Certain functions are driving this more so than others. So you can see sort of on the right-hand side which functions those are, sort of at that career level, that are really pushing these figures. So strategic planning, real estate, human resources, IT development and data science, those are commanding kind of upwards of 9% new higher premiums.
So let's talk about the skills premiums, right? So roles and functions have premiums, but we're seeing more and more that skills have premiums as well. So within the UK, the average digital skills premium is between 10% and 20%, and this is continuing to grow when we compare it against what we saw last year as well.
So on this slide, we're showing artificial intelligence, one of our favourite skills to talk about. So that is commanding up to about a 15% premium, just on that skill alone. It will differ by levels. That's what you're seeing here so the P1 to P5.
We also track the trends of these skills. So on the right-hand side, you'll see the prevalence of how more frequent that is becoming in the market. So it's interesting talking about talent, where is this talent coming from. So that, for example, that P4 level artificial intelligence, the prevalence of that skill is rising, meaning more and more people are sort of performing artificial intelligence at that level.
And so as a result then, the impact that skill has on pay is decreasing in that very specific career band in an example. So let's talk about that maybe within a role, a given job within an organization. So, for example, data science and business intelligence, if we were to use our skills use software, we can add in artificial intelligence skill on top of that role and see that at the 50th percentile brings us up 17% on top of an already very strong base salary figure for that role. So what this means is that understanding the type of roles that you have in your organization, that you'll need in your organization for your digital transformation, are really important because if artificial intelligence is critical, and that's going to be really important to delivering on this business strategy, you need to be prepared to pay 17% premium to get that very specific kind of basket of talent in.
Let's talk about short-term incentives. Let's talk about bonus. So on the left, we're showing over a decade worth of statistics, where we're comparing the target payouts against actual payouts across the UK as a whole. So we can see back in 2011 was the first time in a long time that we were paying out above targets kind of overall as a country, right, so the whole thing.
It's going to fluctuate up and down. 2020 was-- I'm not sure what happened to that year-- but, yeah, that was a predictably low year for actual bonus payouts. So if we focus on 2022, 91%, we're not too far away, kind of overall is paying out target. But then if we look at the right-hand side, we've sort of broken down the distribution of how our bonuses being paid out and those employees and where they're receiving them.
So we can see that big bar in the middle, 19% of employees are being paid plus or minus 5% around their target. And then about 20% of eligible employees are not receiving any targets or any actual bonuses. That's down from last year. Last year, that was only about 23%.
ALASDAIR WOOD: This is an interesting chart. So it's a bit of a health warning here. We collect gender data as part of our surveys. And what we're showing here is that the UK industry, according to our survey sample at least, is around 2/3 percent-- sorry-- 2/3 male.
Now I think that's probably slightly skewed. We were talking about this at lunchtime. But even if we're a few percentage points out there, that's still a quite significant skew towards men in the workplace. And you think about the companies, the organizations, that are submitting to our data bases, they tend to be large corporates.
So we're not picking up some of the other sectors, where perhaps women are more highly employed. But it is still quite a stark finding. And if you look at the numbers on the left-hand side as well, you can see the only area where women dominate is business support functions so back office functions. There are some which are more predictable, technical support very skewed towards men, executives still very skewed towards men, but those ones in the middle perhaps less predictable and still quite a heavy skew. So quite a stark finding there, we're quite surprised by it.
If you look at what pay-- this is just focusing again on gender-- what is the pay situation look like? Interestingly, for executives-- that's this number here on the right-hand side of the first chart-- that's actually improved slightly. So last year, there was a difference there of minus 13%. This year, it is only in inverted commas, minus 8%.
The average is minus 7%, as you can see, so women still paid on average 7% less than men. And the interesting finding on these two charts is the more senior you get, the smaller the gap becomes, according to this data, which is why I thought it was really interesting because it sort of gives the light to some of the arguments that you often hear about in this area. For example, that women will take a career break and will come back on lower rates of pay or will be less aggressive in arguing and pushing for salary increases when they get promoted. That data does not support those arguments, so it's really interesting to see, both for the management track and the professional track. That certainly does not seem to be the case.
It is the case for production employees, manual labour employees, where actually the more senior you get, the bigger the gap becomes. And the gaps here are quite huge, you can see, minus 22% being that W3, so that's the production of manual labour. On the right-hand side, just consistent finding with the previous slide in the business support functions, women actually are getting paid much more comparably with men and, in some cases, higher.
So the message here we've still got a very long way to go on gender pay. And the argument is quite nuanced. It depends on how you look at the data and how you slice it so some really interesting findings there as well. We need to wrap up quickly, so I'll hand back to Lisa.
LISA DONALDSON: Thanks. So we talked a lot about pay in this section. We acknowledge that. But pay is one really important piece of this total rewards, employee experience puzzle. You'll hear a lot from our colleagues about some of the other boxes in this research.
But ultimately what we're showing here are the sort of the top reasons an individual will join an organization and a top reason why they tend to leave. So you can see pay and bonus solidly number one as the reason why people join. It's fallen to number two in what attracts, what retains those employees. So job security, especially in a recession, will come right up to the top of that list.
Flexible work is a number three on the attraction. And so we see a lot of organizations, over 80% of organizations, are looking to improve their flexible work policies. About 70% of organizations are focusing on the benefits piece of the puzzle. And to Al's point about diversity, equity, and inclusion, again, over 80% of organizations are focusing on how do they communicate transparency and some fair pay policies to try to drive the non-financial aspect and try to keep fixed costs reasonable during these difficult times.
