Lately, we’ve been hearing that employees are feeling they’ve gained some leverage in the battle for higher salaries — to the point where they’re seriously considering jumping ship if they don’t get the dough they want. But recent research indicates employers aren’t taking the threat all that seriously.  

In a recent study commissioned by Spherion Staffing, nearly one-fourth (26%) of workers  said they’re at least somewhat likely to look for a new job in the next 12 months (up from 18% last year). More than half (51%) felt the expanding job market gives them more power to negotiate a higher salary either with their current company or with another. And employees list financial compensation, benefits, and growth and earnings potential as the top factors influencing their potential retention.

But pay raises for U.S. employees are expected to hold steady at 3% in 2017, according to a survey by HR consulting giant Willis Towers Watson.

The survey found that virtually all respondents (98%) are planning to give employees raises next year, with salaries for exempt (i.e., professional) non-management employees to increase 3%. That’s the same increase they received in each of the past three years.

Employers are also planning 3.0% average salary increases for management and nonexempt employees. Executives can expect slightly larger raises — 3.1% in 2017, although those are smaller than the average increase executives received this year and in 2015.

Bottom line: If employees have greater leverage in salary matters than they did in previous years, nobody’s told employers about it.

Performance incentives: Holding steady or declining

According to the Willis Towers Watson survey, exempt employees who received the highest performance ratings were granted an average salary increase of 4.6% this year, about 77% larger than the 2.6% increase given to employees receiving an average rating. Companies gave salary increases of less than 1.0% to workers with below-average performance ratings.

The survey also found that annual performance bonuses, which are generally tied to company and employee performance goals, are projected to hold steady or decline slightly in 2017 for most employee groups. Exempt employees are projected to receive bonuses that average 11.6% of salary, roughly the same amount companies budgeted for this year.

Conversely, discretionary bonuses, generally paid for special projects or one-time achievements, are projected to increase slightly compared to bonuses awarded last year. Discretionary bonuses for exempt employees are projected to average 5.6% of salary, slightly more than the 5.3% average bonus awarded in 2015.

The survey was conducted between April and July 2016, and includes responses from 967 companies representing a cross section of industries. The survey report provides data on actual salary budget increase percentages for the past and current year, along with projected increases for the next year.

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