Forecasted 2013 U.S. Base Salary Increases Remain Stable, New Hay Group Research Finds

Forecasted 2013 U.S. Base Salary Increases Remain Stable, New Hay Group Research Finds

U.S. employees can expect median base salary increases of 3.0 percent in 2013, according to new research released by Hay Group, a global management consulting firm. These increases are consistent with forecasted base salary increases reported for the last two years. After factoring in annualized consumer price index growth at 2.2 percent, the resulting pay movement for 2013 is a net gain of 0.8 percent, after employees saw an estimated 0.6 percent net loss in 2012.

“With the economy continuing to grow slowly, it is not surprising that salary increases have followed suit,” said Jeff Blair, Hay Group’s U.S. Productized Services Leader. “Relatively low annual salary increase budgets are limiting the financial rewards available to employers. As a result, organizations are increasingly focused on improving employee engagement and creating a positive work climate for employees.”

According to Hay Group’s research, median 3.0 percent pay increases are being reported for executives, middle management, supervisory and clerical positions. The 3.0 percent increase holds fairly steady across most industries, except the oil and gas and luxury retail sectors, which report 3.3 percent and 3.5 percent median increases, respectively.

“Sectors with increases above the general industry median often have more optimistic business performance outlooks,” said Tom McMullen, Hay Group’s North American Reward Practice Leader. “Some sectors rebounded more quickly and have higher margins than other industries, which may explain why projected base salary increases are higher. Moreover, in most industries we see organizations seeking to remain competitive by placing greater emphasis on variable pay programs, career development opportunities, meaningful job designs and non-financial recognition programs.”

“Organizations are devoting more time and energy to better understanding what employees truly value in their reward package and modifying their programs to reflect those preferences,” adds McMullen. “Quite often, it is the lack of attention to some of the non-financial rewards that drive good employees out of organizations, so this can go a long way towards improving employee engagement and retention.”

About the Survey

Hay Group’s forecast results are based on the latest data available from Hay Group’s U.S. database, provided by 350 U.S. organizations from March through June 2012. This is Hay Group’s 33^rd year of conducting the survey. Typical respondents to the survey include compensation professionals in the Human Resources departments of small to large size U.S. organizations across a wide range of industries. Hay Group’s U.S. database represents compensation practices for almost 2,900 companies and over 6.7 million employees.

For more information, or to arrange an interview, please contact Ben Weiss, 212/840-1661, or ben@blisspr.com.

About Hay Group

Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 85 offices in 48 countries, we work with over 7,000 clients across the world. Our clients are from the private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. Our focus is on making change happen and helping people and organizations realize their potential.

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Ben Weiss, 212-840-1661
ben@blisspr.com