Here We Go Again: 3 Percent Base Salary Increases Forecasted to Continue in 2018, According to Korn Ferry
The salary increase figure is consistent with the actual pay increase of 3 percent reported by the surveyed companies in 2017. These projected and actual increases have remained consistent since the end of the recession and reflect employers’ consistent conservative attitude toward base salary increases.
There is also consistency across most industries and employee groups,
with companies indicating a 3 percent median increase across the board.
“I’m not surprised we are once again seeing a 3 percent base salary
increase this year,” said
There is some variation of practices across organizations in the survey. Organizations at the 90th percentile indicated a 3.3 percent to 3.5 percent increase across employee groups, while the 10th percentile is showing a consistent 2.5 percent increase across all groups. “While the 3 percent salary increase number has become the norm, that doesn’t mean that top performers won’t be rewarded, which is critical in this tight labor market,” added Morse. “These individuals often receive two times the median salary increase of other employees.
“Companies are continuing to evolve how they reward employees. They are relying more on short and long-term incentive plans and financial recognition programs versus simply providing larger annual increases across the board,” said Morse. “The key is for organizations to ensure they are optimizing their reward investment to drive performance and retain their best employees.”
About the survey
Korn Ferry Hay Group’s forecast results are based on the latest data
available from Hay Group’s U.S. PayNet database, provided by
participants representing 450 U.S. organizations from March through
Tracy Kurschner, 612-309-3957