Raises next year are expected to average 3 percent
10/03/2013 2:18 PM
10/03/2013 4:45 PM
Base pay increases for 2014 are expected to average 3 percent for the second straight year, according to a leading compensation survey.
That’s about a full percentage point lower than typical annual raise levels before the recession.
Buck Consultants also reported Thursday on a compensation angle related to the federal Affordable Care Act. Eight percent of the organizations surveyed said they have capped work hours of part-time employees and 12 percent said they are considering it.
The health reform law will require employers in 2015 to offer health insurance options to employees who work 30 hours a week or more.
The Buck survey found that 8 percent of employers “are incenting employees to obtain benefits via another source” such as the online insurance marketplaces designed to provide individual and small-business insurance options for people who don’t have other affordable group or government-sponsored coverage.
Other takeaways from the survey, which was completed in August:
• Only 19 percent of the responding employers planned to add employees in 2014. That was the same percentage as this year.
• Both short-term and long-term incentive awards to employees — bonuses — are likely to be rarer and smaller next year than the amounts recorded in 2012.
• There may be larger pay increases for sought-after employees, especially those in particular information technology and medical professions.
Buck principal David Van DeVoort summarized the outlook: “Employers continue to be cautious with their salary budgets. What’s more, performance ratings got tougher and average promotional pay increases stagnated.”
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