Top 5 Compensation Trends
Posted on May 28, 2013
Experts are expecting compensation trends to stay relatively stable through 2013. Most jobs will continue to see modest increases in pay, while in-demand jobs can expect to see higher raises, especially technical positions.
Here’s an overview of the top five trends to be watching in 2013:
1. Fewer pay freezes
Surveys show that fewer employers are freezing pay this year compared to previous years, a trend that will likely continue as the economy improves. One study of Ohio organizations found that 91% of employers were planning to provide pay increases in 2013, up from just 55% in 2009.
2. Pay increases expected to stay around 3%
Salary projections predict pay increases will be 2.9-3.0 for 2013, compared to 2.7-2.8% over the last few years. These projections are lower for non-profits (2.5) and behavioral health care organizations (2.3).
3. Increased use of benchmarking for compensation decisions
Employers are using benchmarking data to make compensation decisions, relying on local, national and international surveys. Research finds that employers are more likely to guide the compensation discussion with benchmarking and reports than with analytical techniques like predictive modeling and simulations.
4. Merit-based pay raises continue
High-performing employees are receiving higher pay increases than lower-performing employees, surveys show. Top performers in 2012 saw the highest pay increase—4.4% on average—while average performers received average increases of 2%. While many employers had put compensation strategy on the back burner during the down economy, HR Consultant Amy Petrus thinks this will change: “During 2013, I think employers will need to revisit compensation structures that were designed years ago and make sure they have a sound, appropriate, market competitive vehicle to make fair and equitable compensation decisions.”
5. Bright future for IT positions
According to local and national studies, pay is steadily increasing for IT professionals. Data from the Bureau of Labor Statistics shows IT compensation trending well above average. Pay increases for IT professionals are expected to hit 5.3% in 2013, compared to the average of 3%.
Whether you are among the employers raising pay this year or not, compensation strategy is clearly reemerging as a priority for organizations as the economy improves. Make sure you are equipped to make informed compensation decisions with quick access to powerful reports. Find out more about how Custom Web Reporting allows you to create the reports you need for decision-making with just a few clicks. Or, get in touch with us to learn more.
Source: Employers Resource Council