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Salary Increases Remain Flat for 2019

Published Wednesday, August 29, 2018


Contrary to findings from prior surveys, organizations are now holding the line on pay raises for US employees. Allocated budgets for salary increases in 2018 are 2.8% — no change from 2017 — and projected to be only 2.9% in 2019, despite noticeable factors like the tightening labor market and a high rate of workers voluntarily quitting their jobs, according to Mercer’s 2018/2019 U.S. Compensation Planning Survey.

According to the survey, even the windfall of newly available investment dollars from December’s Tax Cuts and Jobs Act (TCJA) is not enhancing the compensation spend for most companies. Mercer’s survey finds that only 4% of organizations have redirected some of their anticipated tax savings to their salary increase budgets.

“While employers initially responded to the tax rate drop with one-time spot bonus awards and some proactive minimum wage increases, little of this money is being invested in the annual pay increase,” said Ms. Sardone.

Alternative ways to invest in talent

With budgets for base compensation increases flat, programs, compensation, and benefits can help enhance the employee experience. These programs, which arm the organization with a different and unique value proposition, are becoming another way to effectively compete for talent in the future of work. By supporting career development and training as well as assistance for financial, physical, and emotional well-being, organizations can advance employees’ careers in meaningful ways and offer a greater sense of purpose.

About the survey

Mercer’s survey includes responses from more than 1,500 mid-size and large employers across the US. The survey results capture seven employee segments: executive, management, professional (sales), professional (non-sales), office/clerical/technical, trades/production/service, and unionized employees across multiple industries.

Source: Mercer

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