Even as the national economy strengthens, pay raises for U.S. employees are improving just a tad, with the average raise in 2015 forecast to be 3 percent.
Although that’s still a bit below pre-recession levels, forecasts from both pay consultancy Hay Group and the WorldatWork 2014-2015 Salary Budget Survey agree this is the minimum range your business should be planning for in 2015 to stay competitive.
The 3 percent median base salary increase covers all main employee categories and most industries and is about the same as the 3 percent raises actually made in 2014. In a few employee categories, including exempt/salaried and officers/executives, the forecast is 3.1 percent.
But keep this in mind when budgeting your salary numbers. After you factor in an annualized consumer price index growth at 2.1 percent, a 3 percent raise really is just a minimal net gain of 0.9 percent, the Hay Group said.
And that’s lower than the expected net gain of 1.6 percent for 2014.
As businesses strive to retain their top talent, raises are likely to be higher for top performers.
According to Mercer’s 2014/2015 U.S. Compensation Planning Survey, those best performers saw their pay increase an average of 4.8 percent in 2014. Average performing employees only received pay hikes of 2.6 percent.
Clearly, the ability of your management team, particularly at the HR level, to measure and understand who those top performers are is an important factor in making sure competitors do not have an advantage in their recruitment efforts.
Two industry sectors are forecast to buck the 3 percent pay raise trend. Oil and gas industry employees should see a median base salary increase of 4 percent next year while most hospital employee groups only will receive an average of 2 percent, according to the Mercer survey.
Mercer’s survey covers responses from more than 1,500 mid-size and large U.S. employers and reflects pay figures for more than 16 million workers.