How much have your pay rates increased in 2015? What will they be in 2016? Are they tied to the market or internally driven? What’s going on with your peer companies around the country?
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Today and tomorrow, we’re pleased to bring you some highlights from the results of the BLR® 2015-2016 Pay Budget Survey. Full survey results are available to our Compensation.BLR.com® subscribers on the website.
Are you considering creating a salary survey? Start on Tuesday, September 29, 2015, with a new interactive webinar, Salary Surveys: Strategies for Gathering and Analyzing Pay Information. Learn More
Who Did We Hear From?
A total of 931 individuals participated in this survey, which was conducted in June 2015. Of those who identified themselves, 58.2% are private for profit, 20.4% are private not-for-profit, 9.7% are public corporations, and 11.7% are government entities.
Companies with 1–250 employees are represented by 58.9% of survey participants and organizations with 251–500 workers account for 13%. Organizations with 501–1,000 employees are represented by 8.1% of survey participants, those with 1,001–5,000 are represented by 11.3%, and organizations with more than 5,000 employees account for 8.7% of survey participants.
Almost half (43.1%) of the participants are in service industries; 15.6% identify as healthcare and social assistance; 23% are in agriculture, forestry, construction, manufacturing, or mining; 9% are in wholesale, retail, transportation, or warehousing; 4% are in real estate or utilities; and 5.3% are in public administration.
Staff-level employees account for 12.6% of the survey participants who self-identified. Supervisors account for 3%, and managers account for 37.4%. Director-level employees account for 28.7%, and vice president or higher round out the field at 18.2%.
2015 Merit Increases
The results of BLR’s 2015-2016 Pay Budget Survey show 16% (down from 18.2% last year) of employers awarding merit increases (averaged across all employee types) of up to 2.5% in 2015 and 42.5% awarding increases between 2.51% and 5%. Another 4.4% are awarding increases from 5.01 to 10% of base pay, and a mere 1.5% are awarding more than 10% merit increases.
The breakdown of employee types shows 13.8% of employers awarded merit increases of up to 2.5% to senior management, 14.7% awarded that amount to management, 16.1% awarded merit increases to nonmanagement salaried exempt employees, 18.2% awarded the same to hourly office employees, and 17% awarded up to 2.5% of base pay as an increase to hourly non-office employees. Among employers awarding merit increases in 2015, the most commonly awarded amount is 2.5%–3% across all employee types.
On average, across all employee types, 31.2% (down from 35.7% last year and 38.1% in 2013) of responding employers did not award merit increases in 2015. The breakdown on that number shows that 12.7% awarded $0 and 18.5% selected N/A.
The Biggest Challenge in Determining 2015 Salary Increases?
When asked to describe their biggest challenge in determining 2015 salary increases, 39% (down from 41.1% last year and 46% in 2013) of survey participants cited budget constraints as the issue. Myriad other challenges were also noted, including:
- A competitive salary market, 13.5%
- Finding usable market data, 12.1%
- Performance management, 6.5%
- Economy/revenue uncertainty, 5.3%
- No (or inadequate) compensation philosophy/strategy/process, 4.9%
- Getting management approval/buy-in, 4.9%
- How to fairly allocate a small increase pool, 3.2%
- Minimum wage increase/new hire rates creating pay compression, 3.2%
- Healthcare reform and increasing benefits costs, 2.3%
- Unfairness or favoritism of managers, 1.4%
Factors Used to Establish a Salary Increase Budget
The factors used to establish a salary increase budget/pool include company history (31.1%), company profit (48.9%), salary increase surveys (46.7%), the consumer price index (26.7%), and inflation rate (22.2%).
Need to adjust your salary structure? Join us Tuesday, September 29, 2015, for a new interactive webinar, Salary Surveys: Strategies for Gathering and Analyzing Pay Information. Earn 1.5 hours in HRCI Recertification Credit and 1.5 hours in SHRM Professional Development Credit. Register Now
The employee-related factors that affect salary increases include merit for 74.8%, job classification for 9.5%, department or division for 3.4%, and seniority for 2.7%.
Organizational-related factors include company profits for 49.5%, board approval for 19.6%, competitor wage rates for 14.5%, and government/legislative approval for 7.5%.
Methods Used to Assign a Salary Range
When it comes to assigning a salary range for a new position, our survey participants use a variety of methods. For example, 66.4% compare the new position to other positions within the company, and 60.5% research location, industry, and position salary data. Only 26.3%, however, consider the chosen applicant’s previous salary.
Sources of Salary Data
Our survey participants use a wide range of sources for salary data, including:
- O-Net Online, 9.5%
- Online recruiters, 12.6%
- Economic Research Institute, 12.8%
- BLR, 18.5% (thank you!)
- Salary.com, 32.6%
- Bureau of Labor Statistics, 37.3%
- Consultants, 29.5%
- Trade associations, 46.8%
- Other, 33.2%
Coming tomorrow, more survey highlights and an introduction to an interactive webinar, Salary Surveys: Strategies for Gathering and Analyzing Pay Information.
Always happy to review the useful results from the BLR surveys. The guidance is very valuable.