As the economy slowly gains strength, so do pay increases doled out by U.S. employers.
Employers, on average, anticipate increasing employee salaries by 2.9% in 2014, a marginal boost from 2.8% this year and 2.7% in 2012 and 2011, according to an annual survey by consulting firm Mercer.
Two other new salary surveys by WorldatWork and The Conference Board project average 2014 salaries to increase by 3.1% and 3.0%, respectively.
This is an improvement from 2009, when average pay raises bottomed out at 2.1%. But it still lags behind the mid-2000s when raises averaged about 3.5%.
The message: The economic recovery has yet to pick up enough steam to substantially boost overall salary budgets.
Impact: The improving economy, however, is forcing employers to give greater pay raises and bonus dollars to top-performing talent.
“Employers recognize that their greatest challenge is to retain their top performers to avoid post-recessionary flight of these valuable assets. This means they have to reward and recognize them,” said Jeanie Adkins, a leader of Mercer’s Rewards practice. “This includes providing higher pay increases along with other non-cash rewards, such as training opportunities and career development.”
