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
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