Employers budget for 3.1% pay raises in 2015 — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Employers budget for 3.1% pay raises in 2015

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in Compensation and Benefits,Human Resources

U.S. workers can expect pay raises averaging 3.1% in 2015, according to the 41st annual WorldatWork Salary Budget Survey. The nonprofit organization found that U.S. employers’ budgets for pay increases have risen slightly from 2.9% in 2013.

This continues a trend of mild increases since 2009, when the average salary budget increase reached an all-time low of 2.2%.

Last year, respondents projected that the 2014 average total salary budget increase across all organizations, employee categories, regions and industries would reach 3.1%, but actual numbers fell just short at 3%.

Sluggish hiring has kept pay raises down. “Salary increase budgets will likely remain close to the 3% mark until market forces require employers to raise wages more aggressively,” said Alison Avalos, WorldatWork’s research manager. “Recovering from the recession is no longer driving employers’ salary budget planning. Current salary budget increase amounts are less about a recovery from widespread pay freezes from a few years back and more about the current marketplace not demanding much growth in the size of pay increases for employees.”

The percentage of employers that won’t award any raises next year has fallen—somewhere between 2% to 5% depending on regional and industry variables. That’s fairly close to historic levels.

Employees in a few metropolitan areas will see slightly smaller raises: Detroit; Miami; Minneapolis; Pittsburgh; Portland, Ore.; San Diego; St. Louis and Tampa, Fla. Slightly higher pay bumps will be the norm in the Houston, Los Angeles and San Francisco areas.

Regardless of where they work, not everyone is in line for the same raise. The WorldatWork survey found that mid-level performers can expect 2.7% merit increases, and low performers may get just 0.6% more in their pay envelopes.

But top performers will be rewarded with pay increases averaging 4%.

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