By Diane Stafford
The Kansas City Star.
Smidgen by smidgen, employee pay raises are edging higher.
Projected wage and salary increases for U.S. employees are likely to average 3 percent in 2015, up from 2.9 percent this year and continuing a slowly escalating rise that began last year.
The outlook, from Mercer’s 2014/2015 U.S. Compensation Planning Survey, published Friday, tracks a “steadily increasing trend” since 2012.
It is, however, a very slow rise, and it won’t happen for everyone.
While 3 percent is the average raise forecast, Mercer researchers note that about 8 percent of workers, labeled as top performers, are likely to get bigger pay increases as their employers try to keep them and keep them happy.
Furthermore, said Mary Ann Sardone, a Mercer partner, employers are “continuing to provide rewards beyond compensation in the form of training and career development.”
Mercer has surveyed employers’ compensation plans for more than 20 years. This year’s outlook came from more than 1,500 employers with more than 16 million employees.
Comparing outlooks with what actually happened in 2014, Mercer found that top-performing employees received average base pay increases of 4.8 percent.
That compared with an average of 2.6 percent for average performers and 1 percent for the lowest-ranked employees.
Generally, employees who are evaluated in the top one-third of their workforces will get higher-than-average raises next year, the survey indicated.
Whatever the exact percentage, the days of across-the-board raises are pretty much gone. Pay based on performance is now the norm.
“It’s an effective way for employers to recognize top performers without increasing budgets dramatically,” said Rebecca Adractas, another Mercer principal.
As expected, the Mercer review found higher raises planned in industries that are doing well. The energy sector, for example, has a 3.5 percent average outlook. The less robust consumer goods sector plans a 2.8 percent average.
Average pay raises sank below 3 percent for five years following the onset of the Great Recession in 2008. Earlier in the 2000s, the average hovered around 3.6 percent. In the 1990s, the average raise usually fell in the 4 to 4.4 percent range.