“Even though the economy continues to show signs of a slow recovery, we do not expect most employees to receive increases at the levels seen in the years prior to 2008 for awhile, when median increases were tracking between 3.5 percent and 4.0 percent,” Hay Group’s North American Reward Practice Leader Tom McMullen said.
“Slower growth in base salary increases is causing most organizations to be innovative in their approach to reward management. We see most organizations having a continued focus on managing their fixed costs in base salary and benefits programs while placing renewed attention on retention and engagement strategies for the talent needed to run their business. Differentiating all rewards and ensuring that top performers receive rewards that are greater than average performers is a continued focus area for organizations. Organizations are quite happy to pay for performance, but only if they get it.”
While most industry sectors are also consistent with this 3.0 percent median base salary increase, including industrial, retail and financial services sectors, the economy impacts industry sectors differently. Certain job families in healthcare systems, such as nursing and clinical employees, are trending at 2.5 percent median increases, while employees in the oil and gas sectors are faring better with 4.0 percent median increases planned for 2012.
Hay Group’s forecast results are based on the latest data available from Hay Group’s U.S. database, provided by 285 organizations in November and December 2011. This is Hay Group’s 33rd year of conducting the survey. Typical respondents to the survey include compensation professionals in the Human Resources departments of small to large size U.S. organizations across a wide range of industries.
