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Promotions, Promotional Raises Surpass Growth of Salary Increase Budgets

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Though U.S. respondents to the “WorldatWork 2018-2019 Salary Budget Survey” reported a 3.1% average (median: 3%) salary increase budget (effectively breaking a four-year trend and meeting last year’s projection), a one-tenth of a percentage increase isn’t the growth that many were expecting, given the extremely tight labor market and tax code changes this year. (See Figure 1.) Perhaps more notable is the healthy spike in promotional increases.

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More employees are progressing in their careers, according to the results of the survey, with an average of 8.6% of employees receiving promotions in 2017 compared to 7.9% in 2016. And raises associated with those promotions are being reported as higher than they have been in the past (mean: 8.7% in 2017, 8.4% in 2016). Several factors could be contributing to this growth:

  • Baby Boomers are leaving the workforce and Millennials are clamoring for professional growth and development. An aging workforce means younger workers will have more opportunities, by default, as older workers retire.
  • An improving economy and tightening job market may have employers using promotions as a means to retain top employees who otherwise might be lured away. Employers also could be using promotions to address internal equity issues that arose from hiring outside talent at a premium.

Salary Budgets: by U.S. Industry
While most U.S. industries share a median of 3%, the range of average salary increase budgets this year is between 2.5% and 3.6%. Continuing to rebound, the Mining, Quarrying and Oil and Gas industry rose 0.7 percentage points to 3.6%, although it is expected to fall to 3.3% in 2019.

Conversely, while Educational Services remained at the bottom of the list at 2.5%, it is anticipated to grow 0.2 percentage points to an average increase budget of 2.7% in 2019. These projections may be even lower than next year’s reality with nationwide teacher strikes and advocacy gaining momentum after organizations had reported estimates in the survey.

Salary Budgets: Global
WorldatWork has been collecting data beyond the United States and Canada since 2012, and currently collects salary budget data for 19 countries.

Among the countries surveyed in 2018, Mexico’s average salary increase budget experienced the greatest growth rising to 4.9% (median: 4.8%) from 4.5% in 2017, while Brazil saw the largest decline, dropping 1.6 percentage points to 5.9% (median: 6%) this year. India, Russia and China continue to lead with the biggest total salary budget increases of 10%, 7.4% and 6.6%, respectively. These countries have remained at the top since WorldatWork expanded its data collection. (See Figure 2.)

Figure 2: Total Salary Budget Increases by Country

 

Actual 2018

Projected 2019

 

Mean

Median

Mean

Median

India

10.0%

10.0%

10.0%

10.0%

Russia

7.4%

7.5%

7.3%

7.5%

China

6.6%

6.9%

6.7%

7.0%

Brazil

5.9%

6.0%

6.1%

6.0%

Mexico

4.9%

4.8%

5.0%

5.0%

Singapore

4.0%

4.0%

4.1%

4.0%

Australia

3.2%

3.0%

3.3%

3.0%

United Kingdom

3.1%

3.0%

3.1%

3.0%

United States

3.1%

3.0%

3.2%

3.0%

Germany

3.0%

3.0%

3.1%

3.0%

Canada

2.9%

3.0%

3.0%

3.0%

Netherlands

2.8%

2.9%

2.9%

3.0%

Sweden

2.8%

2.8%

2.9%

3.0%

Italy

2.7%

2.6%

2.8%

2.6%

Belgium

2.6%

2.5%

2.5%

2.5%

France

2.6%

2.5%

2.7%

2.6%

Japan

2.6%

2.5%

2.7%

2.5%

Spain

2.6%

2.5%

2.7%

2.5%

Switzerland

2.2%

2.0%

2.4%

2.2%


The “WorldatWork 2018-2019 Salary Budget Survey” reports data for 19 countries, covering nearly 15 million employees worldwide. Data was collected in April 2018. The data represent a wide diversity of organizations in a variety of industries.

About the Authors

Alicia Jenkins is program manager, survey research, and Lindsay Strack is manager, research and member resources, both with WorldatWork.

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