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Low unemployment and a tight job market have employers ready to compete to attract and keep the best talent in 2019. A report compiled by Willis Towers Watson explains that employers plan to give slightly larger raises to their employees in 2019. The report continues:
The 2018 General Industry Salary Budget Survey, conducted by Willis Towers Watson Data Services, found U.S. employers project to give exempt, nonmanagement employees (i.e., professional) average pay increases of 3.1% in 2019, compared with 3.0 this year. Nonexempt hourly employees can also expect larger increases next year — 3.0% in 2019 versus 2.9% this year. Employers are planning smaller increases for executives (3.1% versus 3.2%), while steady increases are planned for management employees (3.1%) and nonexempt, salaried employees (3.0%). Only 3% of companies plan to freeze salaries next year. Pay raises have hovered around 3% for the past decade. The last year employers provided significantly larger increases was 2008 (3.8%).
The survey also found companies continue to reward their “star” performers with significantly larger pay raises than average performing employees. Employees receiving the highest possible rating were granted an average increase of 4.6% this year, 70% higher than the 2.7% increase granted to those receiving an average rating.
“After a decade of consistently flat pay raises, we are witnessing a slight uptick as companies are feeling pressure to boost salaries, given the low unemployment rate and the best job market in many years,” said Sandra McLellan, North America Rewards business leader at Willis Towers Watson. “While companies have been able to hold the line on raises, the tides are changing. Many companies are establishing slightly larger salary budgets while at the same time focusing on variable pay such as annual incentives and discretionary bonuses to recognize and reward their best performers.”
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