Pay raises for U.S. employees are expected to hold steady in 2016, according to a survey by global professional services company Towers Watson.
The nationwide survey of more than 1,100 U.S. companies also found that employers continue to reward their best performers with significantly larger pay raises as they look for ways to retain top-performing talent in a tightening labor market.
The survey, conducted by Towers Watson Data Services, found that virtually all respondents (98%) are planning to give employees raises next year and are projecting average salary increases of 3.0% in 2016 for their exempt nonmanagement (e.g., professional) employees. That’s the same increase these employees received this year and in 2014. Employers are also planning 3.0% salary increases for nonexempt salaried and nonexempt hourly employees. Executives and management employees can expect increases that will average 3.1% in 2016. The number of companies that are giving raises has risen steadily since the recession in 2008.
“To a large extent, 3% pay raises have become the new norm in corporate America. We really haven’t seen variation from this level for many years,” said Sandra McLellan, North America practice leader, Rewards, at Towers Watson. “While most organizations are finding the talent they need at current salary levels, we are seeing more employers prioritizing how their salary budgets are being spent, especially in light of their ongoing difficulty in attracting and retaining top performers or employees with critical skills.”
For the remainder of the study findings, click here!