Salary budget increases are up, but barely
- Average U.S. salary budget increases are just above 3% for the first time in four years, according to WorldatWork's 2018-2019 Salary Budget Survey Top-Level Results. The report also found that actual increases met the previous year's projections for the first time in four years. U.S. salary budgets are expected to reach 3.2% in 2019, according to the organization.
- The study, which examines salary budget variances for 19 countries, shows that Brazil had the largest budget decrease, dropping from 7.5% to 5.9%. Mexico had the largest salary budget growth, rising by 0.4% to 4.9%, with a 5% projection for next year. India had the largest salary increase budget of all countries in the study, at 10%.
- Salary budget increases in the U.S. have been slowly rising for months, according to Alison Avalos, WorldatWork's director of research & certification. "However, despite significant tax reform changes and a tight labor market, the one-tenth of a percentage point movement isn’t the growth that was anticipated," she said in a statement. "This year’s survey data gives us little reason to think that U.S. organizations intend to significantly invest more dollars into salary increases for 2019."
For many workers, wages have been relatively stagnant for months. Despite the low unemployment rate, employers have been reluctant to raise pay, instead relying on bonuses and benefits to attract and retain talent.
Big-box retailers may be the exception to that trend, boosting hourly rates even outside of seasonal hiring pushes. Others have had their hands forced by continued minimum wage increases.
Although employees cite benefits, career opportunities and flexible work schedules among the things that keep them engaged, money remains a key motivator. According to a recent survey, almost half of employees would leave their current job for one that pays more. Still, "pay perception" matters, and employers can work to ensure that pay fairness and transparency are well communicated.