Although it’s not the only important factor, a key part of attracting top talent to your organization is compensating them well. How do you know what your 2018 salary forecast should look like? Here are some early projections as reported by the Society for Human Resource Management (SHRM).
California-based compensation analytics firm, ERI Economic Research Institute, reported in their Planning Global Compensation Budgets for 2018 findings that U.S. salary budgets are expected to increase by 3.2% next year. That’s up from 3.1% in 2017 and 3.0% in 2016. Data from WorldatWork, an association of total rewards professionals, shared similar findings in their WorldatWork 2017-2018 Salary Budget Survey.
What do these 2018 salary forecasts suggest for employers and employees? It means there’s going to be more of the same in the coming y ear – minimal changes to company budget plans and employee paychecks.
WorldatWork senior practice leader, Kerry Chou, says even though employers aren’t significantly increasing base salaries, they are still leveraging variable pay to differentiate rewards to top-performing workers. Variable pay can include annual or quarterly bonuses and incentives based on goal achievement by an employee or team. In 2017, according to WorldatWork, the percentage of companies using variable pay options rose 1% for the third consecutive year, to 85%.
A survey from Willis Towers Watson, a global business management firm, reports that employers are handing out bigger salary increases and more variable pay to reward their best performers. So how much more can top employees stand to earn for their top performance? The survey shared the following.
Salary increases:
- Exempt employees with the highest performance ratings were given an average salary increase of 4.5% in 2017.
- Employees with average performance ratings received salary increases around 2.6%.
- Employees with below-average ratings received salary increases of 1.0%.
Variable pay:
- Exempt employees are projected to receive bonuses that average 10.5% of their salary. That’s about the same amount that companies budgeted for 2017.
- Discretionary bonuses that are typically handed out for special projects or one-time achievement are projected to remain steady in 2018 when compared with 2016 data and 2017 budgets.
For companies struggling to offer competitive salaries while maintaining balanced budgets for the new year, other job perks are becoming another big way to attract and retain top talent. Flex hours, work-from-home positions, wellness programs, casual dress codes and professional development opportunities are just a few of the more popular perks being offered to employees.
If you’re a CT employer looking for help recruiting next year’s pool of top talent, connect with A.R. Mazzotta. With 45+ years of experience, four locations and an expert team of staffing specialists, we’ll match you with the best job candidates in the area!