Aug. 2, 2016 — While "three-peat" was a thrilling word coined by the L.A. Lakers in the late 1980s, it's less exciting today — especially when discussing U.S. salary budget increases. Yet, there's no arguing with the numbers: U.S. employers reported that the average 2016 total salary increase budget is 3% (mean and median) for the third year in a row.
These are the findings of the "WorldatWork 2016-2017 Salary Budget Survey," which surveyed 5,759 WorldatWork members from 19 countries and representing 15 million employees. The survey closed in May 2016, and all data include zero-percent responses.
"Organizations are still planning and awarding salary increases, but the amount of the increases remains flat and is not changing year over year," said Kerry Chou, CCP, WorldatWork senior practice leader. "In the U.S. in particular, this may be related to inflation, which remains low. The demand for larger salary increases just isn't there and low unemployment has not been enough to motivate organizations to increase salary budgets."
The story gets worse for Canada where, when aggregated across all employee categories, regions and industries, the average total salary budget increase is 2.6% this year — a drop from the 2.8% budgeted in 2015 and short of the 2.9% projected for 2016.
"The economic contraction Canada experienced in 2015 continues to dampen salary budget increases," Chou said. "Economic uncertainty has employers cautious about increasing budgets and opting for conservative salary increases to attract and retain needed talent. Labor market pressures would likely need to come from multiple directions to accelerate wage growth."
Respondents seem mildly optimistic about 2017, with the average total salary increase budget in Canada projecting to return to 2.8% in 2017, and the median total salary budget increase expected to remain firm at 3%. In the United States, respondents reported plans for a slight increase in 2017, but only up to 3.1%. Among all countries, there was almost no change in growth reported from a year ago.
India maintains the largest salary increase budget of all countries surveyed, with an average budget increase of 10.1% (median: 10.6%), despite a four-tenths of a percentage point fall from 10.5% (median: 11%) in 2015. Brazil reported the only growth in average 2016 total salary budget increase at 7.9% (median: 8%), up from 7.5% (median: 7.8%) last year, and expects a slight rise to 8%, mean and median, in 2017. India and Brazil have retained the largest increases since WorldatWork expanded its data collection in 2012.
Other key findings:
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