Merit Increase Projections for 2012-2013
By Senior HR Business Partner, Joanna Anderson, PHR, MPA
The trend for the majority of companies across the nation is to contain merit increase budgets at 3% or less for 2012-2013. The Washington Post Capital Business reported the “compensation for workers in the Washington region rose only 2.1 in 2012 after remaining virtually flat in the previous year.” The release of this information is timely as many organizations are planning for their year-end salary review cycles and budgeting for 2013 payroll expenses. However, with the anticipated federal budget cuts, merit increases for the next year will not occur for all Washington-area employers.
According to WorldatWork’s 2012-2013 Salary Budget Survey, total salary budget increases in the United Sates are expected to be at 3% across all levels of the organization, from front line non-exempt workers through Executive management. Actual increases granted in 2012 were reported as 2.8% for non-management, non-union hourly and Executive/officer positions. While actual increases were at 2.9% for non-exempt salaried and exempt salaried positions. This data underscores the conservative position that employers are taking in this economy with regard to increasing salaries. Employers may choose to reward their top performers at above average budgeted dollars while forgoing raises across the board. While the top line results of this report have been released free of charge, organizations can purchase the comprehensive report which includes a breakdown of salary increase practices by industry directly from www.worldatwork.org.
Other sources are projecting more modest increases for this year and next. The Society for Human Resources Management and Bureau of Labor Statistics are projecting salary budget increases of 2.5%-2.8%. It is important to understand the market for salary budget increases to align pay practices with market movement to remain competitive with other organizations and preserve spending.
Helios provides comprehensive compensation support to organizations to include merit cycle planning and administration guidance, comprehensive market pricing and salary structure development, salary administration guideline creation, career path development and implementation services. Contact Helios at 703-860-3882 x132 if you would like to learn more about how we can support your organization.