Average 2014 US Salary Increases to Remain at 3 Percent, According to Buck Consultants Survey
Hiring activity remains flat; few employers making changes ahead of Affordable Care Act
NEW YORK — Base pay increases for 2014 will remain at 3 percent for the second year in a row – roughly one percentage point below pre-recession levels, according to the seventh annual “Compensation Planning Survey” released today by Buck Consultants, A Xerox Company (NYSE: XRX).
However, survey respondents provided larger base pay increases for employees with particular skills and for those in IT and medical professions. Fewer respondents provided larger increases to workers in sales and engineering than was the case in Buck’s prior survey.
The survey analyzed responses from more than 320 organizations to determine trends in compensation and other workforce issues.
“Employers continue to be cautious with their salary budgets,” said David Van De Voort, principal, Buck Consultants. “What’s more, performance ratings got tougher and average promotional pay increases stagnated.”
Both short-term (STI) and long-term (LTI) incentives weakened with fewer employees receiving STI in 2012, the last full year this data was collected. Fewer managers and lower-level employees are expected to receive STI payouts in 2014 and the expected size of STI awards forecasted for 2014 is smaller than 2012 actual awards. The average percentage of employees expected to receive new hire LTI grants is down for most employees.
No Sign of Increased Hiring Activity In 2014
Talent retention remains employers’ top HR priority. Employers project no increased hiring activity for 2014 with a mere 19 percent of respondents anticipating adding workers next year, the same as in 2013. According to the survey, recruitment and sourcing talent increased in importance and surpassed employee engagement as the second highest HR priority.
“The fact that employers are more concerned about hiring but not planning to increase hiring suggests that 2014 could be yet another anxious year for both employers, who are still hesitating to act on hiring, and the labor pool, anxious for improved employment prospects,” said Van De Voort.
Impact of Affordable Care Act
Few employers are making changes in anticipation of the Affordable Care Act. Only 8 percent of respondents have capped work hours of part-time employees, with an additional 12 percent considering taking this action. Eight percent are incenting employees to obtain benefits via another source, and an additional 9 percent are considering this approach.
“Even though this survey indicates a lack of action by employers, we know they are actively engaged in planning their health care strategy, while carefully watching the evolving public marketplace,” said Tami Simon, managing director of Buck’s Knowledge Resource Center.
She said the one-year deferral of the employer shared responsibility mandate gives employers extra time to examine their current health insurance programs. Employers can not only make necessary changes to meet the upcoming requirements of the law, but also accurately reflect their employee benefit goals. This examination goes beyond healthcare, because it impacts employees’ total compensation. It’s all about finding the right balance for the particular organization and its workforce.
About the Survey
Buck Consultants’ Compensation Planning for 2014 Survey presents comprehensive statistics on actual pay increases for 2012, current pay increases for fiscal year 2013, and planned increases for fiscal year 2014. The survey was completed in August 2013.
Buck’s survey report, “Compensation Planning for 2014,” is available at no cost to the media by contacting Ed Gadowski at 910-253-9816. It is available to other interested parties for $395 by calling 1-800-887-0509 or visiting http://www.bucksurveys.com. The survey was produced by Buck Consultants’ Knowledge Resources group, which is responsible for national multi-practice legal analysis and publications, government relations, research, surveys, training, and knowledge management.
About Buck Consultants
Buck Consultants, A Xerox Company, is a leader in human resource and benefits consulting with more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and funding some of the nation’s first public and private retirement programs, Buck is an innovator in the areas of retirement benefits, health and welfare programs, talent and human resources solutions, compensation, and employee communication. News and other information about Buck Consultants are available at http://www.buckconsultants.com.
Since the invention of Xerography 75 years ago, the people of Xerox (NYSE: XRX) have helped businesses simplify the way work gets done. Today, we are the global leader in business process and document management, helping organizations of any size be more efficient so they can focus on their real business. Headquartered in Norwalk, Conn., more than 140,000 Xerox employees serve clients in 160 countries, providing business services, printing equipment and software for commercial and government organizations. Learn more at www.xerox.com.
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