U.S. SALARY PROJECTIONS FOR 2018
CNI Recruiting compiled 2018 Salary Projections from surveys performed by the following respected sources. The average of the survey results is a salary increase of 3.1%.
• Aon Hewitt (Human resources services) 3.0%
• Willis Towers Watson (Data services) 3.0%
• WorldatWork (Compensation data) 3.1%
• Economic Research Institute (Compensation data) 3.2%
• The Conference Board (Business research) 3.0%
• Hay Group (Compensation consulting) 3.0%
• Society for Human Resource Managers (Human resources membership firm) 3.2%
According to WorldatWork, only small variations of salary projections are expected within employee categories in 2018:
Nonexempt hourly non-union 3.1%
Nonexempt salaried 3.1%
Exempt salaried 3.2%
Economic Research Institute
The U.S. economy is expected to continue to expand. However, wages haven’t kept up with rising productivity due to technology, which continues to replace workers in many areas; competition from lower-cost global labor markets and other influences. Gross domestic product in the U.S. is expected to increase by 2.5 percent in 2018, up from 2.3 percent in 2017 and 1.6 percent in 2016. Inflation is forecast to slow to 2.4 percent, down from 2.7 percent in 2017, but higher than the 1.3 percent reported for 2016. The unemployment rate is projected to fall slightly to 4.6 percent, down from 4.7 percent this year and 4.9 percent in 2016.
Although middle-class incomes are increasing, corporate profit growth is strong, unemployment is low and companies are reporting difficulty in filling open positions, 2018 salary increases are projected to be 3%, as they have been for the past six years Spending on merit pay and annual bonuses is projected to actually decline to 12.5% of companies’ payroll budgets in 2018, as compared with 12.7% in 2016 and 12.8% in 2015. Forty percent of companies are planning to reduce or eliminate increases for lesser performers in 2018 and 15% are setting more aggressive performance targets.
Willis Towers Watson
Ninety nine percent of survey respondents are planning to provide exempt employees 3% raises in 2018. Executives can expect raises of 3.1%, slightly less than in 2017 and 2016. The survey found exempt employees with the highest performance ratings received an average salary increase of 4.5% in 2017, employees with average ratings received increases of 2.6% and employees with below average ratings received salary increases of 1.0%.
Industries that are leading in 2018 projected increases include Construction, Professional Scientific, and Technical Services, Wholesale Trade, and “Other Services”, reporting projected increases between 3.4 to 3.5 percent. Industries reporting the lowest average projections, 2.6 – 2.9 percent, include Public Administration and Educational Services. Organization size is a deciding factor for projected 2018 increases with smaller organizations (i.e., with 499 or fewer employees, or $30 million or less in revenue) reporting, on average, increases one- to three- tenths higher than their larger counterparts.
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