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.