Salary Increase Budgets Projected to Remain Flat at 3% Again Next Year, Salary.com Survey Finds

New Findings Reveal that Organizations in the U.S. and Canada are Not Increasing Funding to Critical Annual Salary Increase Budgets that Could Help Them Retain Top Performers

Waltham, MA (August 2, 2018)Salary.com, the leading SaaS provider of cloud-based compensation data and analytics, today released the results of its eighth annual U.S. and Canada National Salary Budget Survey – revealing, for the eighth year in a row, that annual salary increase budgets are expected to remain flat at 3% for the upcoming year. In spite of a robust job market, decreasing unemployment rates, and an ongoing war for top talent, these results demonstrate that organizations’ cautionary attitude toward budgeting additional funds for annual salary increases has not changed dramatically since 2011.

Despite rising turnover rates and today’s ongoing war for talent, Salary.com’s survey results demonstrate that participating organizations have not felt a driving need to significantly raise employee salaries year-over-year since the Company began conducting its U.S. and Canada National Salary Budget Survey in 2011. And, the 2019 outlook seems to indicate more of the same – less than one fifth (19.5%) of participating organizations in the US and less than one eighth (12.3%) of participating organizations in Canada are planning to raise their increase budgets next year.

“As organizations begin to budget for 2019, it’s important that they consider the effects that their annual increase budgets will have on their ability to retain top talent over the next year,” said Chris Fusco, Senior Vice President of Compensation at Salary.com. “While the median salary increase budgets reported in our annual survey have held steady at 3% for the last eight years, market pay rates for many jobs have dramatically outpaced these increases. For organizations looking to retain top talent, this can present an enormous challenge if increases are not allocated with retention in mind. With three quarters of participating organizations in the U.S. and Canada projecting no increase in funding for their salary increase budgets again in 2019, it will be important for organizations like these to consider how to maximize the impact of their increase budgets to address the realities of today’s War for Talent and keep top performers’ pay competitive with the market.”

While annual increase budgets are not dramatically increasing year-over-year, there may be good news for employees. In 2018, three quarters of employees received a non-promotional increase, and in both the U.S. and Canada, the percentage of organizations planning to distribute no annual increases to their employees has steadily declined since 2016.

“While organizations remain cautious about adjusting their overall salary increase budgets, we’re encouraged by the declining number of organizations who plan to offer no increase,” said Fusco. “In the U.S., less than 1% of participating organizations indicated that their managers, exempt employees, and non-exempt employees would not be receiving increases in 2019, indicating that while increases remain flat overall, most employees will be seeing more money in their paychecks following their next compensation cycle review.”

A total of 1,462 human resources professionals across 20 diverse industries (including healthcare, manufacturing, financial services, and education) participated in this year’s survey, which closed May 2018. Now in its eighth year, Salary.com’s U.S. and Canada National Salary Budget Survey is designed to collect critical data on how organizations are budgeting for salary increases over the next year.

About Salary.com
Salary.com is the leading SaaS provider of cloud-based compensation market data and analytics. Founded in 1999, the Company serves approximately 4,000 business-to-business customers worldwide with its market-leading CompAnalyst platform, designed to accelerate compensation workflows and improve efficiency. Through its Salary Wizard and consumer website, Salary.com delivers continually updated, reliable market pay data and career content to hundreds of thousands of consumers each year. The Company is committed to helping organizations drive company success by aligning compensation practices with recruiting, performance and development initiatives through easy-to-access data and meaningful insights. For more information, please visit the company website at www.salary.com.

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Victoria Waldron
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