Same Ol’ Same Ol’: 2020 Forecasted Base Salary Increases Remain at 3 Percent, According to Korn Ferry Research
Ninth Year in a Row that Salary Growth Has Stayed Consistent
LOS ANGELES--(BUSINESS WIRE)-- For the ninth year in a row, U.S. employees can expect to see a 3.0 percent median base salary increase in 2020, according to new research released by Korn Ferry (NYSE:KFY). The average base pay increases are for workers at all levels, from clerical through senior executive.
The 2020 salary increase projection is consistent with median actual 2019 base pay increases of 3.0 percent, reported by surveyed companies. These projected and actual increases have remained consistent since the end of the recession and reflect employers’ ongoing conservative attitudes toward base salary increases.
“Even though the U.S. economy remains strong and we are experiencing very low unemployment levels, there are mixed views on anticipated economic growth, which has an impact on wage growth,” said Korn Ferry Senior Client Partner Tom McMullen. “One factor may be that feelings of uncertainty about the future are keeping employers cautious in terms of offering higher growth in fixed costs and base wages.”
While the 3.0 percent anticipated median growth in base salaries is consistent across employee groups from clerical support to executives, there are variations in pay increase practices across organizations. Companies in the top 10th percentile of surveyed organizations estimate a 3.5 percent increase across employee groups in 2020, while the organizations that pay in the bottom 10th percentile predict a 2.5 percent increase.
“While the 3.0 percent median salary increase number has become typical over the years, that doesn’t mean that top performers aren’t being rewarded,” said McMullen. “Companies are relying more on short and long-term incentive plans and pay-for-performance programs to provide meaningful pay differentiation for top talent. In addition, we typically see highly rated talent receiving double the base pay increases of average-rated talent.”
About the research
Korn Ferry’s forecast results are based on the latest data available from its U.S. pay database, collected from March through June 2019. Actual pay data is gathered from the same group of respondents and tabulated in July each year. This is Korn Ferry’s 40th year of conducting the survey. Typical respondents to the survey include compensation professionals in the Human Resources departments of small to large U.S. organizations across a wide range of industries.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We work with clients to design their organizational structures, roles and responsibilities. We help them hire the right people and advise them on how to reward, develop and motivate their workforce. And, we help professionals navigate and advance their careers.
Source: Korn Ferry
Released September 17, 2019