Whether you’re an Information Technology company or a Health Care Provider, the increase in salaries in 2016 will impact your organization.
As a component of our World Class Recruitment Service, CNI Recruiting, a New Jersey based Recruiter that recruits throughout the U. S., publishes periodic business articles. This article discusses 2016 salary increase projections and the impact on retention and recruitment.
2016 Salary Increase Projections
The average salary increase in the U.S. for 2016, as projected by seven national employer surveys is 2.9%. The companies conducting the surveys and the survey results are:
- Fast Company (2.7%)
- Economic Research Institute (ERI) (2.7%)
- Mercer (2.9%)
- The Conference Board (3.0%)
- The Hay Group (3.0%)
- Towers Watson Data Services (3.1%)
- WorldatWork (3.1%)
The survey results are consistent with the recent trend in salary increases:
2012 2013 2014 2015
2.7% 2.8% 2.9% 2.8%
In addition, the surveys indicate that an increasing number of companies are transitioning to short term incentive programs, bonuses and salary increases based on performance, rather than annual cost of living or other annual increases.
Salary Projections By Metropolitan Area
According to the Bureau of Labor Statistics, salary increase projections for 2016 by metropolitan areas indicate no significant outliers. However, it may be useful to note that six cities reported an increase of three to four-tenths of a percentage point above average salary increases in 2015: Detroit, Miami, Portland, San Diego, St. Louis and Tampa.
Bigger Increases For Top Performers
The surveys also indicate that employers continue to provide their best performers with larger pay raises (an average of 5.8%) in order to attempt to retain talent in a tightening labor market.
Employers are offering even higher increases related to promotions. In 2015 base salary raises associated with promotions increased an average of 8%. For professionals, the average was 7.7% and for executives, promotional increases were 9.1% of base salary. It appears that these trends are continuing into 2016. However, these increases are lower than the increases prior to the Great Recession. According to the Bureau of Labor Statistics, average hourly earnings for private-sector jobs have increased about 2% annually, since 2009, compared to 3% previously.