BLR’s 2012-2013 Pay Budget Survey results suggest modest increases for another year, with 40% of employers awarding merit increases of up to 2.5%, 36.5% awarding increases of more than 2.5% and 2% awarding increases above 5%.
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 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 |
|