Not Budging: 2019 Forecasted Base Salary Increases Stay at 3 Percent, According to Korn Ferry Research
15 August 2018 - 10:00PM
Business Wire
For the eighth year in a row, U.S. employees can expect to see a
3 percent median base salary increase in 2019, according to new
research released by Korn Ferry (NYSE:KFY). The average base pay
increases are for workers at all levels, from clerical through
senior executive.
The salary increase figure is consistent with the actual base
pay increase of 3 percent reported by the surveyed companies in
2018. These projected and actual increases have remained consistent
since the end of the recession and reflect employers’ ongoing
conservative attitude toward base salary increases.
The U.S. Bureau of Labor Statistics recently reported that the
overall Consumer Price Index (CPI) rose 2.9 percent during the last
12 months, virtually negating any real wage growth.
“Even though the United States is experiencing very low
unemployment levels and the war for talent is as strong as ever,
the new reality is that substantial pay growth is not a given,”
said Maryam Morse, North American Rewards and Benefits Leader, Korn
Ferry.
There is some variation of pay practices. Companies that pay in
the top 10th percentile of the surveyed organizations predict a 3.2
percent to 3.3 percent increase across employee groups in 2019,
while the organizations that pay in the bottom 10th percentile
predict a 2.2 percent to 2.5 percent increase.
“While the 3 percent median salary increase number has become
typical, that doesn’t mean that top performers won’t be rewarded,
which is critical in this tight labor market,” said Morse. “High
performing individuals often receive two times the median salary
increases of other employees. Many organizations are also
differentiating more dramatically in allocation of pay increases to
help fund the increases for high performers. This includes limiting
awards for standard or substandard performance.
“Companies are continuing to evolve how they reward employees.
They are relying more on short and long-term incentive plans and
pay-for-performance programs, where they can provide meaningful pay
and differentiation to top performers and top talent, versus simply
providing larger annual increases across the board,” added Morse.
“The key is for organizations to ensure they are optimizing their
reward investment to drive performance in a way that is most
meaningful and relevant to their employees. We are at the nascent
stage of personalization and customization in how we deliver
rewards.”
About the research
Korn Ferry’s forecast results are based on the latest data
available from its U.S. pay database, collected from March through
June 2018. Actual pay data is gathered from the same group of
respondents and tabulated in July each year. This is Korn Ferry’s
39th year of conducting the survey. Typical respondents to the
survey include compensation professionals in the Human Resources
departments of small to large U.S. organizations across a wide
range of industries.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help
clients synchronize strategy and talent to drive superior
performance. We work with organizations to design their structures,
roles, and responsibilities. We help them hire the right people to
bring their strategy to life. And we advise them on how to reward,
develop, and motivate their people.
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version on businesswire.com: https://www.businesswire.com/news/home/20180815005149/en/
Korn FerryTracy Kurschner,
612.309.3957Tracy.Kurschner@Kornferry.com
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