If you’re like us, you’re already thinking about next year’s corporate budget – and what to do about salaries.
With so many factors to consider, deciding just how much to raise salaries can be complicated, as any business owner knows.
We ran across new research from Hay Group and WorldatWork that gave us some insight into what employers are thinking on this score.
According to the numbers, workers in the United States can look forward to a modest bump in pay next year. Median base salaries will rise by 3 percent across all main employee categories and most industries.
This increase is below pre-recession levels. After factoring in annualized consumer price index growth at 2.1 percent, the resulting base pay movement for 2015 is expected to be a minimal net gain of 0.9 percent.
This limited growth in salary budgets indicates no major change in the degree of upward pressure on wages – at least for now.
“Although salary budgets in the United States are still below historical levels, budgets have been slowly but consistently increasing since 2009,” said Kerry Chou, senior practice leader for WorldatWork.
However, Chou added, “while the unemployment rate is decreasing, many long-time unemployed have simply quit looking, which makes the rate look more favorable than it is. We would expect that at some point, true unemployment will fall to a level low enough to begin putting more upward pressure on wage growth.”
Hay Group expects the 3 percent median base salary increase to hold steady across most U.S. industries, including consumer products, financial services, health insurance, industrial goods and utilities.
More employers expect to tie reward programs to performance-management practices. These programs include increasing future emphasis on improving variable-pay programs (56 percent of respondents) and improving key non-financial rewards such as career development opportunities (63 percent).
In other words, employers are quite willing to pay for performance, but only if they achieve their performance goals.
About the Author
Will has enjoyed a 20-year career in leadership positions in the hospitality and travel industry throughout the U.S. with the Hyatt, Sheraton, Hilton, Renaissance and Steamboat Ski and Resort corporations. Will received a Bachelor of Science degree from the University of Massachusetts at Amherst. From 2000-2007, he served as President and CEO of the Greater Colorado Springs Chamber of Commerce. He also served as Vice President-Special Projects for the University of Colorado Foundation from 2007 to 2009. Will is a past Chair of the Board of Directors of the National Homeland Defense Foundation and former member of the United States Chamber of Commerce Committee of 100. He is married to Nan, has five wonderful children, and enjoys coaching, traveling, hiking, golfing and skiing.