Pay Raises Stay Flat While More People Finding Work

Aug. 1, 2013
Most manufacturing and distribution employers surveyed are using pay increase budgets to grant merit increases averaging 2.8 percent.

In June 2013, the Bureau of Labor Statistics reported the unemployment rate at 7.6 percent, down from the recession high of 10 percent reported in October 2009. Although the unemployment rate has dropped slowly over the last few years, the 2013 Compensation Data Manufacturing & Distribution survey results show pay increase budgets in the industry have remained very similar this year at 2.9 percent compared to 2.7 percent since 2011. The results indicate employers expect pay increase budgets to remain at 2.9 percent in 2014.

"Stagnant increases have become the norm over the past few years for many employers who remained conservative through the recession," said Amy Kaminski, vice president for Compdata Surveys. "Now, with predictions of a more mobile workforce, companies may need to reexamine the competitiveness of their compensation programs in order to retain skilled workers."

Pay increase budgets vary slightly by industry as electrical and electronic manufacturers reported pay increase budgets of 3.0 percent and expect a slight increase to 3.2 percent next year. Transportation equipment manufacturers reported a budget of 2.7 percent, while paper and printing manufacturers reported a 2013 pay increase budget of 2.4 percent.

Employers use pay increase budgets to make various adjustments to employee salaries, such as merit increases, market adjustments, and promotional increases. More than 78 percent of manufacturing and distribution employers are using pay increase budgets to grant merit increases to employees, and the reported average merit increase budget this year was 2.8 percent. Nearly 27 percent of participating organizations use the pay increase budget for market adjustments, compared to 30.7 percent using budgets for promotional increases. More than 11 percent of organizations surveyed allocated part of the pay increase budget to cost of living adjustments, with the average adjustment reported at 2.3 percent.

About the Survey
Compensation Data Manufacturing & Distribution 2013 provides a summary of pay data, benefits information and pay practices with an effective date of January 1, 2013. Compdata Surveys included more than 150 industry-specific job titles and 450 benchmark titles ranging from entry-level to top executives, with data collected from more than 20,000 organizations across the country.


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