U.S. pay increase budgets rise 2.9 per cent in 2013

Average raise in pay forecast at 3.1 per cent for next year: Survey

Pay increase budgets at employers in the United States have picked up from all-time lows in 2009, going from an average (mean) of 2.2 per cent to 2.9 per cent in 2013, according to the WorldatWork 2013-2014 Salary Budget Survey.

The average raise in base pay for 2014 in the U.S. is projected to be 3.1 per cent which, if achieved, would be the first average increase above three per cent since 2008.

“Salary budgets continue to improve, albeit slowly,” said Kerry Chou, senior compensation practice leader at WorldatWork. “This data adds to the recently released jobs numbers painting an economic picture that shows the U.S. economy is not gaining much momentum. Organizations continue to be challenged in finding meaningful ways beyond three per cent raises to reward talent.”

Other key findings:

Major metropolitan area data: Companies located in or reporting data for employees in Houston, Los Angeles and San Francisco reported the highest actual increases in 2013, averaging 3.1 per cent, found the survey of 5,207 people from 17 countries. Employers in Baltimore, Cincinnati, Detroit and Phoenix reported the lowest overall average salary increase budgets at 2.8 per cent. Most metropolitan areas reported average salary budget increases ranging from 2.8 per cent to 3.1 per cent for 2013, up slightly from 2.7 per cent to 2.9 per cent in 2012.

Industry data: Pay increase budgets for public administration hit an all-time low of 1.3 per cent in 2010 and 2011, but have risen to 2.3 per cent in 2013. The mining, quarrying and oil and gas extraction industries are far above national figures, with average 2013 salary budget increases at 4.1 per cent.

Number of months between increases: During the recession in 2009, many employers froze pay. The average time between raises went up to 18 even 24 months. In 2013, the average time between increases held steady at 12 months.

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