Date: 23-Jul-2020
As the labor market tightens, U.S. salary budgets grew by more than 3% for the first time in four years in 2018, according to the results of a global survey on salary budget trends released by human resources consultancy WorldatWork.
The survey, which was conducted in April 2018, collected data on nearly 15 million workers employed in a wide range of organizations and industries across 19 countries. The results showed that the salary budgets in the U.S. have risen by an average of 3.1% (median: 3.0%) in 2018, and are projected to grow by an average of 3.2% in 2019.
Researchers noted that while this growth level is in line with last year’s projection and breaks a four-year trend during which the average salary budget growth rate held steady at 3%, a one-tenth of a percentage increase is not the level of growth that might be expected given the extremely tight labor market and the tax code changes that went into effect this year.
The results also indicated, however, that more employees are progressing in their careers, with an average of 8.6% of U.S. employees receiving promotions in 2017, up from 7.9% in 2016. The survey also found that the mean value of the raises associated with those promotions was 8.7% in 2017, up from 8.4% in 2016.
Researchers observed that several factors could be contributing to this growth in promotion rates in the U.S., including the departure of baby boomers from the labor market and demands by millennial workers for professional growth and development opportunities. They also speculated that employers could be using promotions as a strategy for retaining top employees who otherwise might be lured away as the economy improves and the job market tightens; and that some employers may be relying on promotions to address internal equity issues that arise from hiring outside talent at a premium.
Broken down by industry, the findings indicated that the range of average salary budget increases in the U.S. in 2018 was between 2.5% and 3.6%. The survey showed, for example, that the average salary budget increase for employers in the mining, quarrying, and oil and gas industry rose 0.7 percentage points to 3.6%, although it is expected to fall to 3.3% in 2019. The results further indicated that while the average salary budget increase for employers in educational services was just 2.5% in 2018, it is projected to grow 0.2 percentage points to reach 2.7% in 2019.
The findings also revealed that there was considerable variability in salary budget trends from country to country. Among the countries surveyed in 2018, India was found to have the largest average budget increase at 10%, followed by Russia (7.4%), China (6.6%), Brazil (5.9%), Mexico (4.9%), and Singapore (4.0%). Meanwhile, the countries shown to have the smallest average salary budget increases in 2018 were Switzerland (2.2%), followed by Spain (2.6%), Japan (2.6%), France (2.6%), and Belgium (2.6%).
© 2018 Liberty Publishing, Inc. All rights reserved. Distributed by Financial Media Exchange.
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