While salary increase budgets remain flat despite a growing economy, a new study by Mercer found that promotional increases are on the rise as employers focus on career progression to retain and engage critical talent.
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“During the recession, employers’ focus shifted from fixed pay to variable pay to control costs. As they have become more comfortable holding the line on fixed cost increases with respect to salary budgets, we’re seeing a steady rise in the use of short-term incentives as a mechanism for rewarding performance to supplement rather low pay raises,” explains Mary Ann Sardone, partner in Mercer’s Talent Practice and regional leader of the firm’s Rewards practice.
“In addition, flat budgets have created more reliance on other reward methods such as developing career opportunities and creating meaningful work experiences that align with the company’s goals and support employees’ needs.”
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