A new survey by Aon Hewitt, the global human resources solutions business of Aon plc, reveals that salaries for U.S. workers continue to rise incrementally as concerns remain about the stability of the global economy. However, workers have the potential to offset low base pay increases through performance-based awards.
According to Aon Hewitt's survey of more than 1,300 U.S. companies, base pay increases for salaried exempt workers were 2.8 percent in 2012, up marginally from 2.7 percent in 2011. Salaries have inched upwards year-over-year since 2009 when pay increases reached an all-time low of 1.8 percent.
Pay increases are expected to rise slightly in 2013. For executives, salaried exempt and salaried nonexempt workers, Aon Hewitt projects base pay increases of 3.0 percent in 2013.
According to Aon Hewitt's report, employers continue to offer variable pay, or performance-based awards that must be re-earned each year, as a primary way to drive performance and increase engagement while minimizing their fixed costs. In 2012, 90 percent of companies offered at least one variable pay program, in line with 2011.
Overall spending on variable pay as a percentage of payroll continues to rise steadily for salaried exempt workers. In 2012, companies spent 12.0 percent on variable pay, compared to 11.6 percent in 2011. Spending is expected to rise slightly to 12.1 percent in 2013.
According to Aon Hewitt's survey, workers in some U.S.
cities can expect to see salary increases higher than the national average in
2013. These cities include Denver (3.6 percent); Austin, Dallas/Fort Worth,
Detroit and San Diego (3.4 percent); and Houston and Kansas City (3.3 percent).
Cities that can expect lower-than-average increases in 2013 include San
Francisco (2.7 percent), Chicago and Minneapolis/St. Paul (2.8 percent).
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