Forecasted 2012 US Base Salary Increases Remain Steady

Location: Philadelphia
Author: Ben Weiss
Date: Friday, February 17, 2012


U.S. employees can expect median base salary increases of 3.0% in 2012, according to recently released Hay Group research. The median increase of 3.0% is consistent for executives, middle management, supervisory and clerical positions. This picture is relatively steady across most industry sectors, and after factoring in annualized consumer price index growth at 3.0%, expected employee wage growth is in line with inflation.

“Even though the economy continues to show signs of a slow recovery, we do not expect most employees to receive increases at the levels seen in the years prior to 2008 for awhile, when median increases were tracking between 3.5% and 4.0%”

While most industry sectors are also consistent with this 3.0% median base salary increase, including industrial, retail and financial services sectors, the economy impacts industry sectors differently. Certain job families in healthcare systems, such as nursing and clinical employees, are trending at 2.5% median increases, while employees in the oil and gas sectors are faring better with 4.0% median increases planned for 2012.

“Even though the economy continues to show signs of a slow recovery, we do not expect most employees to receive increases at the levels seen in the years prior to 2008 for awhile, when median increases were tracking between 3.5% and 4.0%,” said Tom McMullen, Hay Group’s North American Reward Practice Leader. “Slower growth in base salary increases is causing most organizations to be innovative in their approach to reward management. We see most organizations having a continued focus on managing their fixed costs in base salary and benefits programs while placing renewed attention on retention and engagement strategies for the talent needed to run their business. Differentiating all rewards and ensuring that top performers receive rewards that are greater than average performers is a continued focus area for organizations. Organizations are quite happy to pay for performance, but only if they get it.”


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