Participant Data Shows Salary Budgets at 3% for 2014

by Lyle Leritz, Ph.D. 8. January 2014 08:53


ERI's Salary Increase Survey utilizes multiple sources of data to report budget and structure projections for HR and compensation professionals. These sources include user-submitted estimates (ERI subscribers can get complimentary reports simply by completing the questionnaire, while others can purchase the report at a reduced rate for participation), historical increase rates, job function differentials, and economic factors like local unemployment rates. For this analysis, we focused on the raw participant inputs. The 2013-14 salary increase survey became available starting in late August of 2013; as such, this analysis is restricted to data submitted after that point. Additionally, this general analysis includes all industries and areas rather than specific industrial and geographic data as shown in the report. Two criteria were used for exclusion from the analysis: a) no zero (0) values and b) obvious invalid entries (e.g., 54% increase). This resulted in removal of fewer than 7% of the inputs.

As can be seen in the table below, the average salary increase budget reported was 2.96%. Breaking this down by employee group reveals an average of 2.88% for general employees, 2.97% for professional employees, and 3.04% for executives. When looking at the data for structure changes, there were fewer (23%) inputs than for budget. Given that many practitioners are primarily interested in budget figures, this pattern was not surprising. As shown in the table, the average structure movement was estimated at 2.30%.

In addition to budget and structure estimates, we also gather data regarding the time interval between increases as well as percentages of employees eligible for an increase. The vast majority of respondents (98.5%) indicated 12 months as the standard interval between salary increases. Regarding eligibility, results indicated that most employees would be receiving a salary increase in the coming year, with an average of 87.7% eligible compared to 14.7% of employees for whom salaries had been frozen.

Although salary increases have failed to return to the days of 4% budgets, these numbers are a slight to moderate gain over last year’s figures at this time. As an evergreen report, the Salary Increase Survey reports 12-month projections from the planning date provided and is available for participation and purchase year-round.