WorldatWork reports that U.S. organizations will increase 2015 salary budgets slightly to 3.1 percent over the average 3.0 percent in 2014.  Major metropolitan areas such as Los Angeles and San Francisco will likely be at the 3.1 percent range, while smaller markets such as San Diego,  St. Louis and Portland (OR) will come in between 2.7 to 2.9 percent.

The survey projects there will not be any major changes in industry data over the 2014.  Organizations in the educational services, health care and social assistance industries report the lowest salary increase budgets at 2.5 percent.  The mining, quarry and oil industry leads with the highest salary increase budget at 3.8 percent; and the construction industry is next in line with a 3.7 percent salary increase budget. 

Employers who wish to reward top performers are allocating their salary budget dollars to allow the top 5 – 20 percent of performers to receive higher percentage increases, while average employees receive less, and below average performers often receive minimal to no base pay increase. 

WorldatWork reports that merit awards for high performers averaged for the 2013 performance year 4.0 percent and that is expected to go up for the 2014 performance year to 4.1 percent.  (Merit increases look back to the prior 12 month period, which is why these merit increases are reported retrospectively.)  Organizations reported an average of 2.7 percent merit to middle performers for the 2013 performance and low performers averaged a 0.6 percent merit for 2013 performance.

We are not fans of Cost of Living Allowances (COLA) for across the board increases.  See our article from a few years ago titled “A “Witness at the Scene” Compensation Program?” based on Woody Allen’s infamous quote: “80 percent of success is showing up.”

We have purchased a national salary survey through ERI that has base salary data for thousands of positions.  This information is offered at a fee per position. (Silvers HR’s retained clients receive a significant discount for the salary survey data.)  Give us a call to ensure you are paying competitive market rates for your key positions.  The unemployment rate is dropping and your key employees may be taking calls (or making them) for a better paying job.



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