The Bureau of Labor Statistics recently reported the unemployment rate dropped to just over 8 percent as of April 2012. The unemployment rate continues to dwindle at a slow yet steady rate of decline and pay increase budgets are mirroring this trend by increasing at a tepid rate. According to the Compdata Surveys 2012 Compensation Data Services survey, pay increase budgets are at 2.7 percent, reflecting a slight uptick from 2.4 percent reported in 2011 and 2.2 percent reported in 2010. Pay increase budgets are projected to remain relatively stable in 2013, dipping slightly to 2.6 percent.
Pay increase budgets vary by industry as accounting firms report the highest 2012 budget at 3.8 percent. Engineering firms and law firms follow at 3.1 percent and 3 percent, respectively. Media employers report the lowest pay increase budget, 2 percent. Services organizations who reported making adjustments to their pay ranges this year have reported an average adjustment of 1.9 percent, with 1.7 percent projected for 2013.
"For the past few years, pay increase budgets for many industries have stagnated or experienced only lukewarm increases," said Amy Kaminski, director of marketing for Compdata Surveys. "This will likely continue to be the trend until employers begin to feel economically comfortable."
Pay increase budgets are used to make many different types of adjustments to employees' salaries. Nearly 75 percent of services organizations report using pay increase budgets for merit increases. Thirty-four percent offer promotional increases, while 32.1 percent use pay increase budgets for market adjustments. Only 15.3 percent of organizations utilize pay increase budgets to implement cost of living adjustments.
About the Survey
Compensation Data 2012 Services provides a comprehensive summary of pay data, benefits information and pay practices with an effective date of January 1, 2012. More than 100 industry-specific job titles and 400 benchmark titles were surveyed ranging from entry-level to top executives, with data collected from more than 5,100 services employers across the country.