by Charisse Rockett, PHR
The average pay increase employees may expect in 2014 is 2.9% according to an article from CNNMoney, with the findings of Mercer’s Rewards, a consulting business. This is up slightly from an average of 2.8% in 2013. However, this is a significant increase from early in the recession when increases in 2009 were averaging 2.1%, if increases were happening at all. Because of the continued high rate of unemployment in June of 7.6%, employers still manage to have their pick of the talent pool without having to bust their budgets, keeping tighter reins on recruitment and retention costs.
Other factors affecting wages are the costs associated with retirement benefits and the still cloudy path of health care benefits under the Affordable Care Act. Employers will eventually have to increase wages to remain competitive. Jeanie Adkins, a partner of Mercer’s Rewards, stated, “Employers recognize that their greatest challenge is to retain their top performers to avoid post-recessionary flight. This means they have to reward them.”
Possessing a good compensation philosophy is crucial to managing your salary budget, meeting key business strategies, and keeping employees contented. It reassures employees that you are well-equipped with the current market trends, aware of current and future workforce needs, and are paying them a fair wage. If you don’t have a compensation philosophy, you need one and we can help!
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