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Base Pay Set to Increase in 2013

Sunday, September 16, 2012
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If you still have a job next year, there's a good chance you'll be getting a pay increase.

At least that's according to the results of three new surveys -- from Mercer, WorldatWork and the Hay Group -- all of which predict an average raise in base pay of between 2.9 percent to 3 percent in 2013. (Mercer is predicting an average 2.9-percent raise for workers in 2013, while the Hay Group and WorldatWork each set the figure at 3 percent.)

"Employers continue to recognize that, in order to attract and retain top-performing employees, they're going to have to reward them in line with industry dynamics," says Catherine Hartmann, principal with New York-based Mercer's rewards consulting business.

Retaining key talent still remains a key challenge for organizations this year, according to Mercer's 2012/2013 U.S. Compensation Planning Survey, and, as a result, companies are still rewarding their top performers with greater-than-average increases, thereby widening the gap between these employees and those in the lower-performing categories.

Mercer's survey finds the highest-performing employees (8 percent of the workforce) received average base-pay increases of 4.4 percent in 2012, compared to 3.4 percent for the next highest level of workers (29 percent), 2.4 percent for average performers (54 percent), 1 percent for low-performing workers (7 percent) and 0.1 percent for the lowest performers (2 percent).

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The WorldatWork survey, based on 4,299 responses from 13 countries and representing more than 17 million employees, finds the 3-percent U.S. projection for 2013 lags behind that of India, China and Brazil, at 10.7 percent, 8.8 percent and 7.2 percent, respectively. Spain (2.9 percent) and Japan (2.7 percent) join the United States as the lowest projected salary increases in the WorldatWork survey.

Meanwhile, the Hay Group's 3-percent projected increase for 2013 is based on data provided by 350 U.S. organizations between March and June 2012. The increase is 0.8-percent larger than the annualized consumer price index growth -- also known as inflation -- of 2.2 percent, which represents an improvement after employees saw an estimated 0.6-percent net loss last year.

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