Base Pay for U.S. Employees Expected to Make Modest Gains in 2016
05 August 2015 - 01:33AM
Business Wire
WorldatWork’s annual survey forecasts salary
budgets for the United States and 18 countries
United States employees could see a modest boost in pay for 2016
according to the 42nd annual “WorldatWork 2015-2016 Salary Budget
Survey.” Forecasts show the average 2016 budget for raises in the
United States is projected to be 3.1 percent. Budgets increasing
pay at U.S. employers have improved slightly since 2013, up from
2.9 percent to 3.0 percent in 2014 and 2015.
WorldatWork, a nonprofit human resources association and
compensation authority, released today its annual salary budget
survey which covers projected budgets for base salary increases,
promotional increases, total rewards strategies and human capital
expense strategies. Participants for the 2015-2016 survey represent
companies from 19 countries including Canada, Australia, China,
India, Russia and the United Kingdom.
Average total salary budget increases in the United States have
been steadily rising from the all-time lows recorded during the
2009 recession when the average salary budget increase reached 2.2
percent (mean). Organizations continue to converge on increased
budget amounts between 2 and 4 percent. Last year, respondents
projected that the 2015 average total salary budget increase across
all organizations, employee categories, regions and industries in
the United States would reach 3.1 percent (median: 3.0 percent),
but actual numbers fell short.
“With the slowing of growth in budgets for salary increases,
there is speculation of a ’new normal’,” said Alison Avalos, sr.
manager of research for WorldatWork. “Although many reports
indicate improvements in the economy, the competition for talent
hasn’t heated up — employers are able to retain the talent they
need with current practices. The thawing of prevalent pay freezes
in 2009 have helped overall averages recover to the 3.0 percent
mark, but this may be the ’new normal‘ until additional pressure on
wages comes from somewhere else.”
Major Metropolitan Area Data
The salary budget increase averages of participating
organizations reported a variance among major U.S. metropolitan
areas, although the medians are firm at 3.0 percent. While there
are no extreme outliers, a few areas deviated from the national
average trend line this year. The following cities reported a rise
from 2014 to 2015 by three to four-tenths of a percentage point in
average total salary budget: Detroit, Miami, Portland, San Diego,
St. Louis and Tampa. Projections for 2016 are again diverse among
cities when looking at average budget figures, stretching from 2.9
to 3.2 percent.
Industry Data
Of the industries with a survey sample greater than 30, eight
reported a drop in the size of mean salary increase budgets.
Mining, Quarrying and Oil and Gas Extraction, Construction,
Agriculture, Forestry, Fishing and Hunting — which have been
leading all average budget increases fell from 0.6 to 1.3
percentage points this year. Mining, Quarrying and Oil and Gas
Extraction is at the bottom of the list with a 2.5 percent salary
budget increase after increases of 4.1 and 3.8 percent the previous
two years.
Pay for Performance
Even though the size of all salary increase budgets, including
merit budgets, remains on the conservative side, there is still
good evidence of differentiation of awards. Looking at employee
performance in 2014, organizations averaged a 2.7 percent merit
increase for midlevel performers (median: 2.8 percent) and a 4.0
percent payout for top performers (median: 4.0 percent).
Compensation Program Prevalence
The 2015 data shows that 76 percent of organizations are now
utilizing market-based pay increases, a 2 percentage point
improvement from 2014. The usage of most types of bonus programs
has also increased, consistent with findings from other surveys
focused on bonuses that WorldatWork has conducted. Most programs
held steady in their usage since 2014, with a few declining only
slightly. Noncash recognition and rewards are one of those
categories showing a decline, from 2 percentage points down to 49
percent.
Global Perspective
In 2014, all countries participating in the survey reported
salary increase budgets at or above 2013 levels. This year, most of
the 19 participating countries report a marginal increase with a
few declines. In 2014, China was the leading country in the growth
of its average salary budget increase with 8.2 percent (median: 8.3
percent). This year, China’s average increase has dropped to 7.8
percent (median 8.0).
About the Survey
“WorldatWork 2015-2016 Salary Budget Survey” is the largest
survey of its kind with 5,583 responses from 19 countries
representing nearly 15 million employees. (Global Top-Level
Results) WorldatWork collected the survey data in April 2015.
Survey respondents are WorldatWork members employed in the HR,
compensation and benefits departments of mostly large U.S.
companies. All data include zero-percent responses. WorldatWork
will host a Tweet Chat on Sept 2. Join the conversation using
hashtag #wawsbs.
Salary Budget Survey archives: 1974-2014
Credentialed journalists may request a complimentary copy of
the survey report by contacting
amy.repke@worldatwork.org.
About WorldatWork®
The Total Rewards Association
WorldatWork (www.worldatwork.org) is a nonprofit human resources
association for professionals and organizations focused on
compensation, benefits and total rewards. It's our mission to help
total rewards professionals achieve their career goals and
influence their organizations’ success. We do so by providing
thought leadership in total rewards disciplines from the world's
most respected experts and fostering an active community of total
rewards practitioners.
Founded in 1955, WorldatWork has offices in Scottsdale, Ariz.,
and Washington, D.C., and is affiliated with more than 70 human
resources associations across the United States and around the
world.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150804006416/en/
WorldatWorkAmy Repke,
202-315-5514amy.repke@worldatwork.orgorMelissa Sharp,
202-315-5565melissa.sharp@worldatwork.org