With inflation
quickly rising in most of the world, many workers are experiencing very little
rise in wage growth. Back in December 2017, the Hay Group, a division of Korn
Ferry, ran salary forecasting data for salary growth that the United States
could experience in 2018.
Korn Ferry
predicts the US to see an average pay increase of 3% this upcoming year which
has been adjusted according to the 2% predicted inflation rate for 2018. After
adjustments for inflation, American’s can expect to see a real wage increase of
only 1%, which is 0.9% less than wage increases in 2017. Some factors of this
slow change are thought to come because of “companies budgeting
conservatively” according to Kerry Chou, Senior Practice Leader at
WorldatWork.
While salaries
overall are increasing at a slow rate, field such as “social media
communications personals” and “senior engineering technologists”
are experiencing greater salary increases of 5.8% and 5.4% according to
Mercer’s Compensation Planning Survey. These jobs are experiencing greater
growth in salary compensation due to their “in-demand” nature.
In a report
from Empsight, a New York City compensation firm, they noted an important
factor that “only 1 percent of companies forecasted a zero increase as
compared to 3.9 percent last year, which suggests a more optimist trend.”
Brain Kropp, an HR practice leader at
CEB/Gartner, commented saying, “employees are clearly demonstrating
complacency in their careers—they aren’t looking for new opportunities, but
they also aren’t going out of their way to work hard in their current roles. Part
of this complacency is being driven by employees’ expectations for minimal
annual compensation increases and bonus pay, which is leading to lower productivity
and engagement levels.”
To avoid this situation, "leaders need
to think about how to incentivize employees to remain motivated. Without
additional compensation and other key rewards, workers’ desires to go above and
beyond in their jobs will remain limited,” Kropp illustrated. Employers
should “devote time and energy to develop a comprehensive employment
value proposition that best positions their organization as a top employer
of choice.”
As salaries are experiencing slow growth, maintaining
employee morale and ensuring proper compensation tops the list of priorities
for employers. At Converge HR Solutions, we offer an HR Outsourcing service
that covers all of your company’s HR needs to help maintain the level of monetary
and emotional motivation that your employees deserve. Included in
our Outsourcing package is employee compensation and regulatory compliance so
that your company pays employees properly, on time, and are always being
compliant and up to date with the most recent law changes when it comes to compensation.
For more information about how Converge HR Solutions can best serve you, please
visit our website at https://convergehrsolutions.com/ or contact us directly by email at info@convergehrsolutions.com or phone at 610-296-8550.
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