U.S. workers can expect modest pay raises averaging 2.8% next year, compared to 2.7% in 2011 and 2.9% in 2010, according to a survey by Buck Consultants.
The Compensation Planning for 2012 survey also found that 80% percent of respondents have a pay-for-performance philosophy, down from 87% last year.
“Our research into pay practices reveals that most employers plan to hold the line similar to 2011,” said Stephen Mork, principal at Buck Consultants. “Given the slow economic recovery and stubborn unemployment rate, organizations are taking a cautious and conservative approach to compensation planning to stay within their payroll budgets.”
Average promotion increases range from 5.7% (for C-suite employees) to 7.3% (for the vice-president level). A blend of stock options and full value awards (time and performance-based restricted stocks) remain the most prevalent long-term incentive awards for C-suite employees.
Respondents indicated plans to offer the following incentives to help retain top performers: new career development opportunities (64%), market pay adjustments (43%), larger base pay increases (30%), increased non-cash recognition (28%) and larger bonus opportunities (21%). As well, 52% of respondents plan to offer a hiring or retention bonus to employees with specialized industry or product knowledge.
Related articles: