Benefits and Compensation

Pay Budget Survey Indicates Modest Rises for 2012 and 2013

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.)


Compensation.BLR.com, now thoroughly revamped with easier navigation and more complete compensation information, will tell you what’s being paid right in your state—or even metropolitan area—for hundreds of jobs. Try it at no cost and get a complimentary special report. Read more.


2012 Actual Salary Increases and Rate Range Adjustments

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

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:

28.3%

46.8%

22.9%

1.5%

0.5%

Salaried Nonexempt:

42.7%

39.4%

17.5%

0.3%

0.2%

Hourly Office:

32.5%

44.2%

22.4%

0.8%

0.1%

Hourly Nonoffice:

38.2%

41.5%

19.4%

0.8%

0.2%

Average % of Employers

35.4%

43.0%

20.6%

0.9%

0.2%

2012 Average Rate Range Adjustment %

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:

25.9%

55.1%

16.0%

2.6%

0.5%

Salaried Nonexempt:

41.4%

46.4%

11.6%

0.5%

0.2%

Hourly Office:

33.6%

50.2%

14.4%

1.7%

0.2%

Hourly Nonoffice:

38.0%

46.7%

13.3%

1.7%

0.3%

Average % of Employers

34.7%

49.6%

13.8%

1.6%

0.3%

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:

13.5%

28.8%

29.4%

18.3%

10.1%

Salaried Nonexempt:

35.1%

26.7%

24.2%

10.9%

3.1%

Hourly Office:

22.9%

32.6%

29.5%

11.7%

3.4%

Hourly Nonoffice:

30.1%

31.0%

28.0%

8.3%

2.6%

Average % of Employers

25.4%

29.8%

27.8%

12.3%

4.8%

Factors that Affect Raises

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

27.8%

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

2012 Bonuses

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.)

2012 Bonuses Are/Were Given …

Answer Options

Response Percent

Response Count

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

answered question

775

skipped question

742

total

1517

2012 Actual Bonus or Lump Sum Payments

2012 Average Annual Bonus %

Answer Options

N/A

0.00 to 5.00

5.01 to 10.00

10.01 to 20.00

20.01 to 30.00

30.01 or Above

Salaried Exempt:

28.3%

39.7%

14.5%

12.4%

3.6%

1.4%

Salaried Nonexempt:

51.1%

40.0%

5.8%

2.1%

0.7%

0.4%

Hourly Office:

43.0%

47.0%

7.9%

1.6%

0.3%

0.4%

Hourly Nonoffice:

53.44%

39.6%

5.6%

1.0%

0.4%

0.0%

Average % of Employers

44.0%

41.5%

8.4%

4.3%

1.3%

0.6%

2012 Average Lump Sum Payment %

Answer Options

N/A

0.00 to 5.00

5.01 to 10.00

10.01 to 20.00

20.01 to 30.00

30.01 or Above

Salaried Exempt:

49.6%

40.1%

6.3%

2.6%

0.4%

1.0%

Salaried Nonexempt:

63.0%

33.5%

2.5%

0.5%

0.0%

0.5%

Hourly Office:

56.0%

41.6%

1.8%

0.2%

0.0%

0.5%

Hourly Nonoffice:

61.1%

37.2%

1.4%

0.2%

0.0%

0.2%

Average % of Employers

57.4%

38.0%

3.0%

0.9%

0.1%

0.5%

2012 Rate Range Adjustments

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.

2012 Rate Range Adjustments

Answer Options

N/A

0.00 to 2.50

2.51 to 5.00

5.01 to 10.00

10.01 or Above

Exempt:

26%

55%

16%

2.5%

.5%

Hourly Nonoffice:

40%

45%

13%

2%

.3%

Criteria Used to Make Rate Range Adjustments

Answer Options

Response Percent

Response Count

Salary survey of benchmark positions

53.9%

545

Company profit

42.2%

427

Company history

23.0%

233

Other (please specify)

21.2%

214

Consumer price index

15.8%

160

Inflation rate

15.2%

154

answered question

1011

skipped question

506

total

1517

2013 Salary Increases

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.

2013 Bonuses

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.

If bonuses are given, how are they determined?   

Answer Options

Response Percent

Response Count

Determined by individual performance

48.5%

401

Based on company profits

42.7%

353

Based on company performance against budget

38.0%

314

A combination of individual performance and across the board

19.6%

162

Other (please specify)

16.1%

133

Given across the board

11.9%

98

answered question

827

skipped question

690

total

1517

2013 Rate Range Adjustments

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.

2013 Average Rate Range Adjustment Percentage

Answer Options

N/A

0.00

0.01 to 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

27.3%

34.3%

22.2%

14.1%

0.0%

1.0%

1.0%

Salaried Nonexempt:

42.3%

30.6%

17.7%

8.2%

0.0%

0.0%

1.2%

Hourly Office:

34.8%

34.8%

20.2%

10.1%

0.0%

0.0%

0.0%

Hourly Nonoffice:

45.5%

29.9%

18.2%

5.2%

1.3%

0.0%

0.0%

Average

37.5%

32.4%

19.6%

9.4%

0.3%

0.3%

0.6%

2013 Maximum Individual Increases

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.

2013 Maximum individual Increase Percentage

Answer Options

N/A

0.00

0.01 – 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

24.5%

22.6%

15.1%

23.6%

8.5%

1.9%

3.8%

Salaried Nonexempt:

42.1%

22.7%

10.3%

12.5%

6.8%

1.1%

4.6%

Hourly Office:

32.3%

21.6%

20.4%

20.4%

3.3%

0.0%

2.2%

Hourly Nonoffice:

42.7%

18.3%

18.3%

14.6%

2.4%

0.0%

3.7%

Average

35.4%

21.3%

16.0%

17.8%

5.3%

0.8%

3.5%

2013 Planned Average Merit Increase Percentage

Answer Options

N/A

0.00

0.01 – 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

19.4%

23.1%

17.1%

38.1%

0.0%

0.000

2.2%

Salaried Nonexempt:

40.0%

21.0%

12.4%

25.7%

0.0%

0.0%

1.0%

Hourly Office:

26.1%

25.2%

22.5%

26.1%

0.0%

0.0%

0.0%

Hourly Nonoffice:

37.4%

20.2%

21.2%

20.2%

0.0%

1.0%

0.0%

Average

30.7%

22.4%

18.3%

27.6%

0.0%

0.3%

0.8%

2013 Average General Increase

Answer Options

N/A

0.00

0.01 – 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

34.7%

28.1%

17.4%

19.0%

0.0%

0.0%

0.8%

Salaried Nonexempt:

45.5%

25.3%

16.2%

12.1%

0.0%

0.0%

1.0%

Hourly Office:

36.9%

27.0%

19.8%

16.2%

0.0%

0.0%

0.0%

Hourly Nonoffice:

43.3%

21.7%

19.6%

15.5%

0.0%

0.0%

0.0%

Average

40.1%

25.5%

18.2%

15.7%

0.0%

0.0%

0.5%

Percentage

Demographic Data—Survey Participants

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.

Industries Represented

Answer Options

Response Percent

Response Count

Accommodation, Food Services

1.0%

10

Administrative and Support Services

0.6%

6

Agriculture, Forestry, Fishing, and Hunting

0.5%

5

Arts, Entertainment, and Recreation

1.6%

16

Construction

2.6%

27

Educational Services

5.0%

51

Finance and Insurance

8.6%

88

Health Care and Social Assistance

14.3%

147

Information (Media, Data, Telecommunication)

2.2%

23

Management of Companies and Enterprises

0.6%

6

Manufacturing

17.4%

179

Mining, Quarrying, and Oil and Gas Extraction

0.7%

7

Other Services (except Public Administration)

3.3%

34

Professional, Scientific, Technical Services

7.3%

75

Public Administration

4.0%

41

Real Estate and Rental and Leasing

1.7%

18

Retail Trade

2.6%

27

Transportation and Warehousing

2.2%

23

Utilities

3.3%

34

Waste Management/Remediation Services

0.3%

3

Wholesale Trade

1.2%

12

Other (please specify)

19.1%

197

answered question

1029

skipped question

488

total

1517