Base pay increases for 2014 will remain at three per cent for the second year in a row — roughly one percentage point below pre-recession levels, according to a survey released by Buck Consultants, A Xerox Company.
However, survey respondents provided larger base pay increases for employees with particular skills and those in IT and medical professions. Fewer respondents provided larger increases to workers in sales and engineering than was the case in Buck's prior survey.
"Employers continue to be cautious with their salary budgets," said David Van De Voort, principal at Buck Consultants. "What's more, performance ratings got tougher and average promotional pay increases stagnated."
Both short-term incentives (STI) and long-term incentives (LTI) weakened, with fewer employees receiving STI in 2012. Fewer managers and lower-level employees are expected to receive STI payouts in 2014 and the expected size of STI awards forecasted for 2014 is smaller than 2012 actual awards.
The average percentage of employees expected to receive new hire LTI grants is down for most employees, found the survey of 320 employers.
No sign of increased hiring
Talent retention remains employers' top HR priority. Employers project no increased hiring activity for 2014 with 19 per cent of respondents anticipating adding workers next year, the same as in 2013.
Recruitment and sourcing talent increased in importance and surpassed employee engagement as the second highest HR priority, found Buck.
"The fact that employers are more concerned about hiring but not planning to increase hiring suggests that 2014 could be yet another anxious year for both employers, who are still hesitating to act on hiring, and the labour pool, anxious for improved employment prospects," said Van De Voort.
Affordable Care Act
Few employers are making changes in anticipation of the Affordable Care Act. Only eight per cent of respondents have capped the work hours of part-time employees, with an additional 12 per cent considering taking this action.
Eight percent are incenting employees to obtain benefits via another source, and an additional nine per cent are considering this approach.
The one-year deferral of the employer shared responsibility mandate gives employers extra time to examine their current health insurance programs, said Tami Simon, managing director of Buck's Knowledge Resource Center. Employers can not only make necessary changes to meet the upcoming requirements of the law, but also accurately reflect their employee benefit goals.
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