Despite an improved economy, new research shows most workers will not get an improvement in pay. To some extent, the move is a hangover from the Great Recession, when companies found that they could hold salaries flat and offer workers modest pay packages in the name of profitability.
Professional services firm Aon reported:
Despite a strengthening economy and high job rates, most U.S. workers are unlikely to see sizeable increases in their salaries for 2018, according to new research from Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions.
Aon’s 2017 U.S. Salary Increase Survey of 1,062 U.S. companies, projects base pay is expected to be 3.0 percent in 2018, up slightly from 2.9 percent in 2017. Spending on variable pay is expected to be 12.5 percent of payroll— a decrease to levels not seen since 2013.
Among the reasons that the increases will be modest is that workers who companies believe produce the best results will get improved pay. “Lesser performers” will get little or nothing. U.S. corporations appear to have shifted toward a worker meritocracy.
Increases will be widely different among industries, the data show:
Aon’s research also shows variation by industry. Workers in the automotive (3.2 percent), computer (3.2 percent), accounting/consulting/legal (3.3 percent) and telecommunications (3.2 percent) industries are expected to see higher-than-average salary increases in 2018, while workers in education (2.7 percent), construction/engineering (2.8 percent) and medical devices (2.8 percent) are expected to see lower-than-average increases. Variable pay budgets by industry vary widely, ranging from 19.3 percent in the pharmaceutical industry and 16.4 percent in banking/finance to 5.3 percent for workers in the health care/medical services field.
Aon offered no analysis for the spread. It may be that some workers are just lucky in terms of the fields they have chosen.