Friday, August 15, 2014

Average raise in 2015 forecast at 3% — will you be competitive?

Here’s a benchmark for you: According to recent research, the average raise in 2015 will be 3%. Are you in that ballpark?  
Along with the strengthening economy and growing job market, pay raises for US employees are improving, according to Mercer’s 2014/2015 US Compensation Planning SurveyThat 3% figure is up slightly from 2.9% in 2014, 2.8% in 2013 and 2.7% in 2012.
These results are indicative of a steadily increasing trend. Additionally, salary increases for top-performing employees – 8% of the workforce – will be higher as companies continue to focus on retaining and engaging top talent.
Mercer’s most recent survey, which has been conducted annually for more than 20 years, includes responses from more than 1,500 mid-size and large employers across the U.S. and reflects pay practices for more than 16 million workers.
Results are captured for five categories of employees: executive, management, professional (sales and non-sales), office/clerical/technician, and trades/production/service.

Top performers getting the rewards

As organizations strive to balance reward programs with budgets and the need to retain critical talent, they are analyzing key segments of their workforce and concentrating rewards on top performers. Consequently, the range between increases to high-performing employees and those given to lower performing employees continues to widen.
Mercer’s survey shows the highest-performing employees received average base pay increases of 4.8% in 2014 compared to 2.6% for average performers and 0.1% for the lowest performers.

Growth sectors vary

In addition to differentiation seen across various employee performance  segments, variations exist among industry sectors. Compared to the average pay increase of 3.0% in 2015, organizations within high-performing industries plan to grant higher raises.
The Energy industry is among the highest with a projected average pay increase of 3.5%. In contrast, other industries expect to award less next year, including Consumer Goods at 2.8% and Non-Financial Services at 2.8%.

source: HRmorning