(847) 236-1208

Salary Planning for 2019

September 18, 2018  |   Compensation,Uncategorized   |     |   Comments Off on Salary Planning for 2019

key-951783__340Salary increase budgets appear to be finally passing the 3% mark as companies compete for talent in an ever-tightening labor market, according to several salary surveys. Even so, the forecast still calls for relatively modest increases, as companies focus on the overall Employee Value Proposition.

The projected total salary budget increase for 2019 is around 3.1% for Non-exempt employees and 3.2% for Exempt salaried and Officers/Executives. In 2018 it was about 3.1% across the board. Projected increases for employees in the U.K. are at 3.1% and 3.0% for Canadian employees. It’s important to note that generally companies will adjust their salary structures about .5% to 1.0% below their salary increase budgets.

Year-over-year wage growth is 1.1% in 2Q 2018, but when inflation is taken into account, wages have actually declined by 1.4%, according to the PayScale Index. Even though inflation has been mild, the modest pay gains for most employees mean they have less buying power than a year ago.

Certain job categories in the PayScale Index have also seen higher wage growth, such as Accounting and Finance (2.5%), Art and Design (2.4%), and IT (2.1%). The Art and Design pay growth stems from the growing demand for graphic designers and UX designers. Pay increases for IT positions have been mixed, with raises driven by niche areas with high demand, such as cybersecurity, AI, machine learning, data scientists, and front end engineers.

One of the biggest obstacles facing companies is maintaining competitive compensation and benefits for employees, cited by 72% as being moderately or very challenging, according to the PwC Trendsetter Barometer. Sourcing and securing talent is another challenge (64%), along with hiring and retaining skilled professionals (64%). Increasingly, companies are deciding to develop the employees they have; 88% said they have initiatives to train and upskill workers and 67% said they would redeploy talent from a different function.

Although base salary increases have been modest, more companies are offering other types of rewards that don’t necessarily show up in the surveys. For example, more organizations reported a higher growth in bonuses relative to the growth in base pay. Benefits are another non-monetary way to appeal to employees. This includes the when, where and how work is done. Telecommuting is a particularly appealing benefit.

Contact Us

BCR has experience in working with organizations on developing pay philosophies, compensation structures and salary planning programs and processes. Reach out to us if you should want to explore how we can assist you in ensuring your organization’s valuable human resources are being truly rewarded for their performance.

Written by: Barbara Manny, BCR President and Consultant

BCR is a local, minority-owned firm with more than 25 years experience in serving non-profit, public, and privately held entities in the key areas of Benefits and Compensation Consulting, Performance Management, Human Resource Organization Development, and Human Resource Information Systems and Processes.

Share this post with your network…

Comments

comments