Workers shouldn’t bank on getting a big raise in 2014. New research has found that salaries are expected to jump 3 percent in 2014, rising slightly from the 2.9 percent increase in 2013.
That modest jump is still the largest jump workers have seen since 2008, when salaries rose by 3.7 percent for salaried employees. That jump happened right before the onslaught of the Great Recession.
"While it appears that pay levels are slowly rebounding, we're still far below prerecessionary levels of compensation spending as companies continue to hold the line on fixed costs," said Ken Abosch, compensation, strategy and market development leader at Aon Hewitt, which conducted the research. "Salaries represent the largest portion of employer costs today. With a sizable talent pool available and increasing global competition for goods and services, companies aren't feeling tremendous pressures to increase base pay to attract top talent. Instead, they are executing on a pay-for-performance vision that rewards employees based on a mix of business and individual results."
Those raises, however, were not universal across the board. Top-performing employees can expect to see a 4.7 percent increase, while average employees can expect to see a 2.6 percent raise. Employees who did not meet expectations should expect to see raises of 0.2 percent and 0.9 percent.
"We've seen a dramatic shift in the mix of compensation over the past decade, with variable pay assuming the largest component of compensation growth," Abosch said. "Performance-based awards are attractive to employers because they tie employee compensation to business results and help give them more control over their costs. There is also a tremendous upside for employees — particularly those who are high-performing workers — because they have the opportunity to be rewarded for exceeding their goals. Regardless of economic conditions, variable pay programs will continue to be the primary way employers differentiate rewards in the future."
Workers in certain cities and industries can also expect to see bigger raises, the researchers found. Energy, oil and gas workers as well as workers in the construction and mining industries can all expect to see larger-than-average raises. Workers in education, health care and government fields, on the other hand, are expected to see the smallest raises this year.
Additionally, workers in certain cities can expect to see bigger raises as well. Employees in Kansas City, Mo., and Denver can expect to see higher-than-average raises this year. However, workers in Boston and New York will be seeing lower-than-average raises this year.
More than 1,100 companies contributed to this research.
Originally published on BusinessNewsDaily.