What’s Old is New Again: 3 Percent Base Salary Increases Forecasted to Continue in 2017, According to Korn Ferry Hay Group Research
There is also consistency across most industries and employee groups in
regard to median pay increases. All employee groups — from clerical to
executive — are indicating about a 3 percent median increase. “The 3
percent base salary increase has become a bit of a broken record during
the past several years,” said
However, the 3 percent median pay increase number doesn’t necessarily mean that all employees should expect to receive this number. There is a reasonable spread of practices across organizations in the survey. Organizations at the 90th percentile consistently indicate a 3.5 percent increase budget across all employee groups, while the 10th percentile is showing 2 percent across all groups. “We typically see top performers in organizations receiving between 1.5X and 2X the median salary increase for employees,” added McMullen. “So top performing individuals could expect to receive salary increases upwards of 6 to 8 percent.”
“Our survey data is indicative of a mixed economic outlook. While we’ve had upward pressure in wages, due to the lowest unemployment in seven years and minimum wage increases, many organizations are still uncertain of their economic outlook,” said McMullen. “This coupled with relatively low inflationary pressures is causing many organizations to keep growth in fixed costs, such as salaries and benefits, in check.”
“On the other hand, we’re seeing there is a willingness to provide compensation upside through short and long-term incentive plans and financial recognition programs. Organizations are willing to provide handsome cash payments using these programs if they get the corresponding performance from the organization and its employees,” added McMullen.
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 more than 850 U.S. organizations from March
Korn Ferry Hay Group’s Global PayNet database contains data for more than 20 million job holders in 24,000 organizations across more than 110 countries. Click here to learn more about PayNet.