The Bureau of Labor Statistics reported the unemployment rate at just over 8 percent as of June 2012. The unemployment rate continues to dwindle at a very slow rate of decline and pay increase budgets are mirroring this trend by increasing at a tepid rate. The 2012 Compensation Data Manufacturing & Distribution survey results reported pay increase budgets at 2.8 percent, reflecting a slight uptick from 2.7 percent reported in 2011. Pay increase budgets are projected to slightly increase to 2.9 percent in 2013.
Pay increase budgets vary by industry as machinery manufacturing companies and electrical and electronic manufacturing companies report the highest 2012 budget at 3 percent. Chemical and pharmaceutical manufacturers and transportation equipment manufacturers follow at 2.9 percent. Paper and printing manufacturing employers report an average pay increase budget of 2.4 percent. Manufacturing & distribution organizations who reported making adjustments to their pay ranges this year have reported an average adjustment of 2.1 percent, with the same 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 http://www.payscale.com/mypayscale.aspx . "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. Seventy-six percent of manufacturing and distribution organizations report using pay increase budgets for merit increases. Nearly 30 percent offer promotional increases, while 25.6 percent use pay increase budgets for market adjustments. Only 12.4 percent of organizations utilize pay increase budgets to implement cost of living adjustments.
About the Survey
Compensation Data 2012 Manufacturing & Distribution provides a comprehensive summary of pay data, benefits information and pay practices with an effective date of February 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 nearly 28,000 manufacturing and distribution organizations across the country.