Among employers awarding merit increases in 2012, the most commonly cited increases ranged from 2.5% to 3.0%. This corresponds closely with SHRM’s recently announced figure of 2.8%.
Last year’s survey indicated an average “planned” merit increase for 2012 of 2.1%. Actual merit increases for 2012, however, were higher than anticipated for the first time in at least two years. On average, 22.6% of responding employers withheld merit increases and 35% withheld general (unrelated to performance) increases from their employees in 2012. (See details in tables below.)
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2012 Average Merit Increases
Answer Options (%)
N/A
0.00 to 2.50
2.51 to 5.00
5.01 to 10.00
10.01 or Above
Salaried Exempt:
11.8%
40.6%
43.5%
2.8%
1.3%
Salaried Nonexempt:
31.7%
37.0%
30.2%
0.9%
0.1%
Hourly Office:
19.4%
43.9%
34.9%
1.5%
0.2%
Hourly Nonoffice:
27.8%
42.1%
28.8%
1.1%
0.3%
Average % of Employers
22.6%
40.9%
34.3%
1.6%
0.5%
2012 Average General Increases
28.3%
46.8%
22.9%
42.7%
39.4%
17.5%
32.5%
44.2%
22.4%
0.8%
38.2%
41.5%
35.4%
43.0%
20.6%
2012 Average Rate Range Adjustment %
25.9%
55.1%
16.0%
2.6%
41.4%
46.4%
11.6%
33.6%
50.2%
14.4%
1.7%
38.0%
46.7%
13.3%
34.7%
49.6%
13.8%
13.5%
29.4%
18.3%
10.1%
35.1%
26.7%
24.2%
10.9%
3.1%
32.6%
29.5%
11.7%
3.4%
30.1%
31.0%
28.0%
8.3%
25.4%
29.8%
12.3%
4.8%
Respondents chose the three most important factors that affect raises.
Answer Options
Response Percent
Response Count
Merit/Performance
84.5%
892
Company profits
59.3%
626
Competitors' wage rates
34.2%
361
Approval of Board of Directors
293
Job classification
23.6%
249
Other (please specify)
14.2%
150
Approval of Government Board, Commission, Legislature, etc.
9.8%
103
Department or division
8.4%
89
Seniority
7.6%
80
answered question
1055
skipped question
462
total
1517
While 8% of respondents offered bonuses in lieu of raises, 65% paid bonuses in addition to salary increases in 2012. 71.7% paid bonuses to their exempt employees in 2012 with 40% offering amounts of 5% or less and 32% awarding amounts of greater than 5%. In comparison, 47% of those surveyed awarded bonuses to their hourly non-office workers with 40% offering 5% or less and 7% awarding amounts greater than 5%. (See details on the tables below.)
Instead of base pay increases
8.0%
62
In addition to base pay increases
44.9%
348
Some of both
20.3%
157
Other: None given
18.58%
144
Other: Will be given at end of year
1.81%
14
Other: Given to selected employees
2.45%
19
Other: Given to top of range employees
0.77%
6
Other: Sales commissions only
0.65%
5
Other: Miscellaneous
2.58%
20
775
742
2012 Average Annual Bonus %
0.00 to 5.00
10.01 to 20.00
20.01 to 30.00
30.01 or Above
39.7%
14.5%
12.4%
3.6%
1.4%
51.1%
40.0%
5.8%
2.1%
0.7%
0.4%
47.0%
7.9%
53.44%
39.6%
5.6%
1.0%
0.0%
44.0%
4.3%
0.6%
2012 Average Lump Sum Payment %
40.1%
6.3%
63.0%
33.5%
2.5%
56.0%
41.6%
1.8%
61.1%
37.2%
57.4%
3.0%
55% of employers responding to our survey made adjustments of 2.5% or less to their exempt employee rate ranges and 16% made adjustments of 2.51 to 5% to that same group. Also, 2.5% made adjustments of 5 to 10%, while 0.54% adjusted their exempt ranges by as much as 10%. 26% made no adjustment to exempt salary ranges in 2012.
A little over 45% of the responding employers made rate range adjustments of 2.5% or less to their hourly non-office workers, with 13% making adjustments of 2.5 to 5%. Less than 2% of employers made adjustments of 5 to 10%, while 0.34% made adjustments of over 10%. 38% made no adjustment to rate ranges for that same group. 35% made no adjustment to employee rate ranges for any employee group.
Exempt:
26%
55%
16%
.5%
40%
45%
13%
2%
.3%
Salary survey of benchmark positions
53.9%
545
Company profit
42.2%
427
Company history
23.0%
233
21.2%
214
Consumer price index
15.8%
160
Inflation rate
15.2%
154
1011
506
Although actual merit increases for 2012 are an improvement over 2012 planned increases, expectations for 2013 still reflect a slow recovery. Though 18% of the employers who responded to this question in our survey expect to offer 2013 merit increases of up to 2.5%, 22% plan no increase at this time and 31% haven’t yet made a decision regarding 2013 merit increases. The survey shows, however, that 27.5% plan to offer merit increases of 2.5 to 5% and 1% plan to offer increases above 5%. The SHRM survey’s recently released figure is similar at 3.0%.
The most common range of amounts indicated for 2013 increases for exempt and nonexempt/hourly office workers is 2.5 to 3%. For hourly non-office workers, the most commonly planned increase is 2 to 2.5%.
According to the survey, 18% of employers plan to offer general increases of up to 2.5% in 2013, 16% plan to award general increases from 2.5 to 5%, and 0.46% plan to offer increases above 5%. 25.5% of employers surveyed plan to offer no general increase in 2013 and 40% have made no decision at this time.
A mere 9% of those surveyed responded with information regarding their plans for bonuses in 2013. 23% of them plan to offer no bonuses and 54% are undecided at this time.
Of those who plan to award them, 8% plan to offer bonuses of up to 2.5% of base pay and 8% plan to offer 2.5 to 5%. 9% of those who responded plan to award bonuses in lieu of raises, 34% will award bonuses in addition to salary increases, and 21% will award both bonuses and raises in 2013.
Determined by individual performance
48.5%
401
Based on company profits
353
Based on company performance against budget
314
A combination of individual performance and across the board
19.6%
162
16.1%
133
Given across the board
11.9%
98
827
690
No rate range adjustments are expected in 2013 for 32% of survey respondents, though 20% expect to adjust their rate ranges by up to 2.5%, 0.57% expect to make adjustments of up to 10%, and 37% are undecided.
Rate ranges for 1% of the employers surveyed are regulated by union agreements, for 2% they are legislated, and for 9% they are based on internal criteria such as budget constraints and funding for nonprofit organizations.
0.00
0.01 to 2.50
5.01 to 7.50
7.51 to 10.00
27.3%
22.2%
14.1%
42.3%
30.6%
17.7%
8.2%
1.2%
34.8%
20.2%
45.5%
29.9%
18.2%
5.2%
Average
37.5%
32.4%
9.4%
21% of the employers responding to this question indicated they will offer no individual increases and 35% are undecided. 34%, however, will offer individual increases of up to 5%, 6% will offer up to 10%, and 4% will offer above 10% to selected individuals.
0.01 - 2.50
24.5%
15.1%
8.5%
1.9%
3.8%
22.7%
10.3%
12.5%
6.8%
4.6%
32.3%
21.6%
20.4%
3.3%
2.2%
14.6%
2.4%
3.7%
21.3%
17.8%
5.3%
3.5%
23.1%
17.1%
38.1%
0.000
21.0%
25.7%
26.1%
25.2%
22.5%
37.4%
30.7%
27.6%
28.1%
17.4%
19.0%
25.3%
16.2%
12.1%
36.9%
27.0%
19.8%
43.3%
21.7%
15.5%
25.5%
15.7%
Organizations. A total of 1,517 organizations participated in this survey, which was conducted in June 2012. Of those who identified themselves, 51% are privately owned, 9% are public entities, 38% are government or nonprofits, and 2% of them are employee owned organizations. 61% are located in labor markets exceeding 500,000.
Labor Relations. 2.5% of the employers surveyed have a 90-100% unionized workforce. Also, 73.5% of them have a workforce that is less than 5% union employees.
Exempt vs. Nonexempt. 49% of the respondents have fewer than 5% salaried nonexempt employees, and 29% have over 50% salaried exempt employees.
Industries. Almost half (45%) of the participants are in service industries; 21% are in agriculture, forestry, construction, manufacturing, or mining; 6% are in wholesale, retail, transportation, or warehousing; and 24% are in real estate, utilities, or “other.”
Participants. Compensation professionals account for 12% of the survey participants who self-identified, other human resources professionals make up 67%, and 21% are in other areas with HR responsibilities.
Accommodation, Food Services
10
Administrative and Support Services
Agriculture, Forestry, Fishing, and Hunting
Arts, Entertainment, and Recreation
16
Construction
27
Educational Services
5.0%
51
Finance and Insurance
8.6%
88
Health Care and Social Assistance
14.3%
147
Information (Media, Data, Telecommunication)
23
Management of Companies and Enterprises
Manufacturing
179
Mining, Quarrying, and Oil and Gas Extraction
7
Other Services (except Public Administration)
34
Professional, Scientific, Technical Services
7.3%
75
Public Administration
4.0%
41
Real Estate and Rental and Leasing
18
Retail Trade
Transportation and Warehousing
Utilities
Waste Management/Remediation Services
3
Wholesale Trade
12
19.1%
197
1029
488
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