Base pay increases for 2014 will remain at 3% for the second year in a row—roughly one percentage point below pre-recession levels, according to Buck Consultants’ seventh annual Compensation Planning Survey.
However, some employees will do better than others. Survey respondents said they plan to reserve the largest pay increases for employees in the information technology and medical professions. Earning smaller raises will be salespeople and engineers.
The best employees, as defined by their organizations’systems, can expect pay bumps averaging 4.3%, while those ranked in the middle of the pack will have to make due with 2.5% raises.
The survey analyzed responses from more than 320 organizations to determine compensation trends.
“Employers continue to be cautious with their salary budgets,” said Buck Consultants’ David Van De Voort. “What’s more, performance ratings got tougher and average promotional pay increases stagnated.”
Employees won’t be able to count on generous short-term bonuses or long-term stock incentives, compared with 2012, the last full year for which data is available.
Fewer managers and lower-level employees are expected to receive incentive payouts in 2014, and those that do get them will find their bonuses smaller than in 2012.
Talent retention—not hiring—remains employers’ top HR priority, the Buck survey found.
To retain top performers, 57% of employers said they plan to provide new career development opportunities, compared with just 25% that said they’ll increase base pay and 23% that plan to offer larger bonuses.
No sign of greater hiring in 2014
Employers project no increased hiring activity for 2014, with a mere 19% of respondents anticipating adding workers, the same as in 2013.
There’s a paradox at work here. Buck’s survey data indicate that employers are concerned about hiring, but they’re not planning to do much of it. Van de Voort says this “suggests that 2014 could be yet another anxious year for both employers, who are still hesitating to act on hiring, and the labor pool, anxious for improved employment prospects.”