Economic Tether Holds Strong: 2015 Salary Increase Projections Parallel 2014
Following in the “path” of 2013, though it was predicted to rise by one-tenth, the actual increase for 2014 remained at three percent. According to WorldatWork, salary increase projections for 2015 are expected to remain stagnant around the three percent mark, overall with the projection for 2015, yet again, at one-tenth of a percent (0.1%) more than the previous year’s (2014) actual average at three percent.
HayGroup, the Society for Human Resource Management (SHRM), and Mercer also report that there will be around a three percent increase overall for 2015. With the salary budget increase projection anticipated at 3.1 percent again for 2015, it is likely that the actual “increase” could be zero between 2014 and 2015.
WorldatWork cites the lack of “market force” on employers as the main reason increases have remained at the three percent mark, overall, for the past five years. There is little to no motivation for employers to raise wages to stay competitive, as the current marketplace is not demanding pay increase growth. WorldatWork also predicts that the negligible growth we have been seeing will continue until there is a demand for growth within the marketplace. Organizations continue to report between two to four percent increases with, still, little to no effort to raise budgets over four percent. HayGroup states that:
“With typical base salary increases still below pre-recession levels, organizations are walking a fine line between maintaining a focus on managing their labor costs given the still-mixed economy, while also improving employee engagement and retention levels…”
Although the national, overall increases are likely to remain around three percent, SHRM reports two industries that differ slightly from the overall 2015 projections. The oil and gas industry is expected to see an increase of around four percent, while hospitals can expect to see an increase of a mere two percent. Other industries, reported by Mercer, including high tech, insurance, life sciences, mining/metals, manufacturing (durable & nondurable), and retail/wholesale are expected to remain around 2.9 percent to three percent for 2015. Many of the projections are a significant increase from the actual 2014 increases, with most expected to rise between two- to three-tenths of a percent.
Regional differences are also expected for 2015. While north central, south central, and the west coast all align with the national projections at three percent, the northeast and southeast regions are slightly below national at 2.9 percent. (Mercer)
Collectively, all sources seem to agree, that the overall increases for 2015 will remain somewhere within three to 3.1 percent, nationally, and between two to four percent across all industries and regions within the United States. The economic growth, or lack thereof, that drives the salary budget increases still is not significant enough to push overall increases above the pre-2009 recession level. Until significant economic growth is achieved, it seems that increases will continue to be relentlessly tethered around the three percent mark.