Survey: Modest Pay Budget Increases for 2012

In last year’s 2011 Pay Budget Survey, employers reported that their average planned merit pay increase for 2011 would be 1.98%, meaning the actual merit increases for 2011 were lower than anticipated for a second year in a row.

Although the average planned merit increase for 2012 is an improvement over last year’s survey, expectations for 2012 still reflect a slow recovery. (Remember, respondents in 2009 were planning an average planned merit pay increase of 3.71%.)

Meanwhile, according to the 2012 survey, the average planned general increase for next year is 1.35% compared with 1.18% given in 2011. The actual general increases for 2011 were 1.29%, which exceeded expectations.

A total of 1,637 organizations participated in the survey, which was conducted in June 2011.

Comparisons by Job Level and Region

According to the 2012 results (see Tables 1 and 2 below), the average planned merit increase (defined as a higher wage rate paid to an employee on the basis of agreed on criteria such as efficiency and performance) is 2.2% for exempt employees and 2.1% for nonexempt office employees, a slight improvement over the 2011 planned increases of 2.1% for exempt and 2.0% for nonexempt.

This year, East Central employees can expect higher raises than last year. The average planned merit increase for exempt, nonexempt office, and nonunion plant is 2.2%, up from 1.7% in 2011. The Northeast/ Mid-Atlantic Region, which reported 2.2% for 2011, has reported 2.3% for 2012 and remains the region with the highest planned merit increases for exempt, nonexempt office, and nonunion plant employees.

Other Comparisons

BLR’s 2012 Pay Budget Survey results also include data based on profit or nonprofit status, as well as whether the respondent was located in a large metropolitan area. The survey found that for-profit employers are planning higher average merit increases for both exempt and nonexempt employee, than nonprofits.

The survey also found that employers in large metropolitan areas (with a labor market of over 500,000) are planning 2.4% average merit increases for exempt and 2.3% for nonexempt employees. Those in nonmetro areas (labor market of under 500,000) are planning average merit increases of 1.7% for exempt employees and 1.6% for nonexempt employees.

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BLR’s 2012 Pay Budget Survey Regional Groupings

The regions reported are organized as follows:

Central/Rocky Mountain/Southwest: AZ, CO, ID, KS, MT, ND, NE, NM, NV, SD, UT, WY

East Central: IA, IL, IN, MI, MN, MO, OH, WI, WV

Far West: AK, CA, HI, OR, WA

Northeast/Mid-Atlantic: CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VA, VT

South: AL, AR, FL, GA, KY, LA, MS, NC, OK, SC, TN, TX

Table 1: Merit Increases for 2011 and Planned for 2012

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Table 2: General Increases for 2011 and Planned for 2012

For a complete copy of the report, go here.

In tomorrow’s Advisor, planned increases by company size and industry, plus some very good news—your job descriptions are pre-written and up-to-date.

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