Average salary raises hold steady at 3% for yet another year
- Most employees can expect annual wage increases in 2018, says Willis Towers Watson (WTW), the global advisory, broking and solutions company, but around the same amount as the past few years — unless they're top performers.
- WTW Data Services found that 99% of employers plan to give annual wage increases, averaging 3.0% for exempt workers, including managers and non-exempt workers. Executives can expect increases averaging 3.1%, a bit more than 2017 raises.
- The survey found that top performers can expect the biggest salary increases. Exempt workers will receive 4.5% on average, or 73% more than the 2.6% raises average performers can expect. Below-average performers can expect increases of about 1.0%. Performance bonuses and discretionary bonuses, which are based on one-time projects, will account for some variable pay increases.
Although annual wage increases won't show much improvement between now and 2018, as a recent WorldatWork study showed, top performers will get the highest reward, as they should.
This latest survey's figures don't differ much from last year's numbers; employers are still being conservative with their budgets. Minimum-wage increases across states and municipalities might be one reason they're holding the line. Or employers may have raised wages to comply with the now-halted U.S. Department of Labor overtime rule. Benefits calculations likely played a role as well, as healthcare costs continue to rise.
Employers should keep finding ways to reward top performers to keep them onboard, even through moderate pay increases or informal recognition efforts.