HR Management & Compliance

Pay Budget Survey Indicates Modest Rises for 2012 and 2013

BLR’s 2012-2013 Pay Budget Survey results suggest modest increases for another year, with 40% of employers awarding merit increases of up to 2.5%, 36.5% awarding increases of more than 2.5% and 2% awarding increases above 5%.

Among employers awarding merit increases in 2012, the most commonly cited increases ranged from 2.5% to 3.0%. This corresponds closely with SHRM’s recently announced figure of 2.8%.

Last year’s survey indicated an average “planned” merit increase for 2012 of 2.1%. Actual merit increases for 2012, however, were higher than anticipated for the first time in at least two years. On average, 22.6% of responding employers withheld merit increases and 35% withheld general (unrelated to performance) increases from their employees in 2012. (See details in tables below.)


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2012 Actual Salary Increases and Rate Range Adjustments

2012 Average Merit Increases

Answer Options (%)

N/A

0.00 to 2.50

2.51 to 5.00

5.01 to 10.00

10.01 or Above

Salaried Exempt:

11.8%

40.6%

43.5%

2.8%

1.3%

Salaried Nonexempt:

31.7%

37.0%

30.2%

0.9%

0.1%

Hourly Office:

19.4%

43.9%

34.9%

1.5%

0.2%

Hourly Nonoffice:

27.8%

42.1%

28.8%

1.1%

0.3%

Average % of Employers

22.6%

40.9%

34.3%

1.6%

0.5%

2012 Average General Increases

Answer Options (%)

N/A

0.00 to 2.50

2.51 to 5.00

5.01 to 10.00

10.01 or Above

Salaried Exempt:

28.3%

46.8%

22.9%

1.5%

0.5%

Salaried Nonexempt:

42.7%

39.4%

17.5%

0.3%

0.2%

Hourly Office:

32.5%

44.2%

22.4%

0.8%

0.1%

Hourly Nonoffice:

38.2%

41.5%

19.4%

0.8%

0.2%

Average % of Employers

35.4%

43.0%

20.6%

0.9%

0.2%

2012 Average Rate Range Adjustment %

Answer Options (%)

N/A

0.00 to 2.50

2.51 to 5.00

5.01 to 10.00

10.01 or Above

Salaried Exempt:

25.9%

55.1%

16.0%

2.6%

0.5%

Salaried Nonexempt:

41.4%

46.4%

11.6%

0.5%

0.2%

Hourly Office:

33.6%

50.2%

14.4%

1.7%

0.2%

Hourly Nonoffice:

38.0%

46.7%

13.3%

1.7%

0.3%

Average % of Employers

34.7%

49.6%

13.8%

1.6%

0.3%

Answer Options (%)

N/A

0.00 to 2.50

2.51 to 5.00

5.01 to 10.00

10.01 or Above

Salaried Exempt:

13.5%

28.8%

29.4%

18.3%

10.1%

Salaried Nonexempt:

35.1%

26.7%

24.2%

10.9%

3.1%

Hourly Office:

22.9%

32.6%

29.5%

11.7%

3.4%

Hourly Nonoffice:

30.1%

31.0%

28.0%

8.3%

2.6%

Average % of Employers

25.4%

29.8%

27.8%

12.3%

4.8%

Factors that Affect Raises

Respondents chose the three most important factors that affect raises.

Answer Options

Response Percent

Response Count

Merit/Performance

84.5%

892

Company profits

59.3%

626

Competitors’ wage rates

34.2%

361

Approval of Board of Directors

27.8%

293

Job classification

23.6%

249

Other (please specify)

14.2%

150

Approval of Government Board, Commission, Legislature, etc.

9.8%

103

Department or division

8.4%

89

Seniority

7.6%

80

answered question

1055

skipped question

462

total

1517

2012 Bonuses

While 8% of respondents offered bonuses in lieu of raises, 65% paid bonuses in addition to salary increases in 2012. 71.7% paid bonuses to their exempt employees in 2012 with 40% offering amounts of 5% or less and 32% awarding amounts of greater than 5%. In comparison, 47% of those surveyed awarded bonuses to their hourly non-office workers with 40% offering 5% or less and 7% awarding amounts greater than 5%. (See details on the tables below.)

2012 Bonuses Are/Were Given …

Answer Options

Response Percent

Response Count

Instead of base pay increases

8.0%

62

In addition to base pay increases

44.9%

348

Some of both

20.3%

157

Other: None given

18.58%

144

Other: Will be given at end of year

1.81%

14

Other: Given to selected employees

2.45%

19

Other: Given to top of range employees

0.77%

6

Other: Sales commissions only

0.65%

5

Other: Miscellaneous

2.58%

20

answered question

775

skipped question

742

total

1517

2012 Actual Bonus or Lump Sum Payments

2012 Average Annual Bonus %

Answer Options

N/A

0.00 to 5.00

5.01 to 10.00

10.01 to 20.00

20.01 to 30.00

30.01 or Above

Salaried Exempt:

28.3%

39.7%

14.5%

12.4%

3.6%

1.4%

Salaried Nonexempt:

51.1%

40.0%

5.8%

2.1%

0.7%

0.4%

Hourly Office:

43.0%

47.0%

7.9%

1.6%

0.3%

0.4%

Hourly Nonoffice:

53.44%

39.6%

5.6%

1.0%

0.4%

0.0%

Average % of Employers

44.0%

41.5%

8.4%

4.3%

1.3%

0.6%

2012 Average Lump Sum Payment %

Answer Options

N/A

0.00 to 5.00

5.01 to 10.00

10.01 to 20.00

20.01 to 30.00

30.01 or Above

Salaried Exempt:

49.6%

40.1%

6.3%

2.6%

0.4%

1.0%

Salaried Nonexempt:

63.0%

33.5%

2.5%

0.5%

0.0%

0.5%

Hourly Office:

56.0%

41.6%

1.8%

0.2%

0.0%

0.5%

Hourly Nonoffice:

61.1%

37.2%

1.4%

0.2%

0.0%

0.2%

Average % of Employers

57.4%

38.0%

3.0%

0.9%

0.1%

0.5%

2012 Rate Range Adjustments

55% of employers responding to our survey made adjustments of 2.5% or less to their exempt employee rate ranges and 16% made adjustments of 2.51 to 5% to that same group. Also, 2.5% made adjustments of 5 to 10%, while 0.54% adjusted their exempt ranges by as much as 10%. 26% made no adjustment to exempt salary ranges in 2012.

A little over 45% of the responding employers made rate range adjustments of 2.5% or less to their hourly non-office workers, with 13% making adjustments of 2.5 to 5%. Less than 2% of employers made adjustments of 5 to 10%, while 0.34% made adjustments of over 10%. 38% made no adjustment to rate ranges for that same group. 35% made no adjustment to employee rate ranges for any employee group.

2012 Rate Range Adjustments

Answer Options

N/A

0.00 to 2.50

2.51 to 5.00

5.01 to 10.00

10.01 or Above

Exempt:

26%

55%

16%

2.5%

.5%

Hourly Nonoffice:

40%

45%

13%

2%

.3%

Criteria Used to Make Rate Range Adjustments

Answer Options

Response Percent

Response Count

Salary survey of benchmark positions

53.9%

545

Company profit

42.2%

427

Company history

23.0%

233

Other (please specify)

21.2%

214

Consumer price index

15.8%

160

Inflation rate

15.2%

154

answered question

1011

skipped question

506

total

1517

2013 Salary Increases

Although actual merit increases for 2012 are an improvement over 2012 planned increases, expectations for 2013 still reflect a slow recovery. Though 18% of the employers who responded to this question in our survey expect to offer 2013 merit increases of up to 2.5%, 22% plan no increase at this time and 31% haven’t yet made a decision regarding 2013 merit increases. The survey shows, however, that 27.5% plan to offer merit increases of 2.5 to 5% and 1% plan to offer increases above 5%. The SHRM survey’s recently released figure is similar at 3.0%.

The most common range of amounts indicated for 2013 increases for exempt and nonexempt/hourly office workers is 2.5 to 3%. For hourly non-office workers, the most commonly planned increase is 2 to 2.5%.

According to the survey, 18% of employers plan to offer general increases of up to 2.5% in 2013, 16% plan to award general increases from 2.5 to 5%, and 0.46% plan to offer increases above 5%. 25.5% of employers surveyed plan to offer no general increase in 2013 and 40% have made no decision at this time.

2013 Bonuses

A mere 9% of those surveyed responded with information regarding their plans for bonuses in 2013.  23% of them plan to offer no bonuses and 54% are undecided at this time.

Of those who plan to award them, 8% plan to offer bonuses of up to 2.5% of base pay and 8% plan to offer 2.5 to 5%. 9% of those who responded plan to award bonuses in lieu of raises, 34% will award bonuses in addition to salary increases, and 21% will award both bonuses and raises in 2013.

If bonuses are given, how are they determined?   

Answer Options

Response Percent

Response Count

Determined by individual performance

48.5%

401

Based on company profits

42.7%

353

Based on company performance against budget

38.0%

314

A combination of individual performance and across the board

19.6%

162

Other (please specify)

16.1%

133

Given across the board

11.9%

98

answered question

827

skipped question

690

total

1517

2013 Rate Range Adjustments

No rate range adjustments are expected in 2013 for 32% of survey respondents, though 20% expect to adjust their rate ranges by up to 2.5%, 0.57% expect to make adjustments of up to 10%, and 37% are undecided.

Rate ranges for 1% of the employers surveyed are regulated by union agreements, for 2% they are legislated, and for 9% they are based on internal criteria such as budget constraints and funding for nonprofit organizations.

2013 Average Rate Range Adjustment Percentage

Answer Options

N/A

0.00

0.01 to 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

27.3%

34.3%

22.2%

14.1%

0.0%

1.0%

1.0%

Salaried Nonexempt:

42.3%

30.6%

17.7%

8.2%

0.0%

0.0%

1.2%

Hourly Office:

34.8%

34.8%

20.2%

10.1%

0.0%

0.0%

0.0%

Hourly Nonoffice:

45.5%

29.9%

18.2%

5.2%

1.3%

0.0%

0.0%

Average

37.5%

32.4%

19.6%

9.4%

0.3%

0.3%

0.6%

2013 Maximum Individual Increases

21% of the employers responding to this question indicated they will offer no individual increases and 35% are undecided. 34%, however, will offer individual increases of up to 5%, 6% will offer up to 10%, and 4% will offer above 10% to selected individuals.

2013 Maximum individual Increase Percentage

Answer Options

N/A

0.00

0.01 – 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

24.5%

22.6%

15.1%

23.6%

8.5%

1.9%

3.8%

Salaried Nonexempt:

42.1%

22.7%

10.3%

12.5%

6.8%

1.1%

4.6%

Hourly Office:

32.3%

21.6%

20.4%

20.4%

3.3%

0.0%

2.2%

Hourly Nonoffice:

42.7%

18.3%

18.3%

14.6%

2.4%

0.0%

3.7%

Average

35.4%

21.3%

16.0%

17.8%

5.3%

0.8%

3.5%

2013 Planned Average Merit Increase Percentage

Answer Options

N/A

0.00

0.01 – 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

19.4%

23.1%

17.1%

38.1%

0.0%

0.000

2.2%

Salaried Nonexempt:

40.0%

21.0%

12.4%

25.7%

0.0%

0.0%

1.0%

Hourly Office:

26.1%

25.2%

22.5%

26.1%

0.0%

0.0%

0.0%

Hourly Nonoffice:

37.4%

20.2%

21.2%

20.2%

0.0%

1.0%

0.0%

Average

30.7%

22.4%

18.3%

27.6%

0.0%

0.3%

0.8%

2013 Average General Increase

Answer Options

N/A

0.00

0.01 – 2.50

2.51 to 5.00

5.01 to 7.50

7.51 to 10.00

10.01 or Above

Salaried Exempt:

34.7%

28.1%

17.4%

19.0%

0.0%

0.0%

0.8%

Salaried Nonexempt:

45.5%

25.3%

16.2%

12.1%

0.0%

0.0%

1.0%

Hourly Office:

36.9%

27.0%

19.8%

16.2%

0.0%

0.0%

0.0%

Hourly Nonoffice:

43.3%

21.7%

19.6%

15.5%

0.0%

0.0%

0.0%

Average

40.1%

25.5%

18.2%

15.7%

0.0%

0.0%

0.5%

Percentage

Demographic Data—Survey Participants

Organizations. A total of 1,517 organizations participated
in this survey, which was conducted in June 2012. Of those
who identified themselves, 51% are privately owned, 9% are
public entities, 38% are government or nonprofits, and 2%
of them are employee owned organizations. 61% are located
in labor markets exceeding 500,000.

Labor Relations. 2.5% of the employers surveyed have a
90-100% unionized workforce. Also, 73.5% of them have a
workforce that is less than 5% union employees.

Exempt vs. Nonexempt. 49% of the respondents have fewer
than 5% salaried nonexempt employees, and 29% have over
50% salaried exempt employees.

Industries. Almost half (45%) of the participants are in service
industries; 21% are in agriculture, forestry, construction,
manufacturing, or mining; 6% are in wholesale, retail, transportation,
or warehousing; and 24% are in real estate, utilities, or “other.” 

Participants. Compensation professionals account for 12% of
the survey participants who self-identified, other human resources
professionals make up 67%, and 21% are in other areas with HR
responsibilities.

Industries Represented

Answer Options

Response Percent

Response Count

Accommodation, Food Services

1.0%

10

Administrative and Support Services

0.6%

6

Agriculture, Forestry, Fishing, and Hunting

0.5%

5

Arts, Entertainment, and Recreation

1.6%

16

Construction

2.6%

27

Educational Services

5.0%

51

Finance and Insurance

8.6%

88

Health Care and Social Assistance

14.3%

147

Information (Media, Data, Telecommunication)

2.2%

23

Management of Companies and Enterprises

0.6%

6

Manufacturing

17.4%

179

Mining, Quarrying, and Oil and Gas Extraction

0.7%

7

Other Services (except Public Administration)

3.3%

34

Professional, Scientific, Technical Services

7.3%

75

Public Administration

4.0%

41

Real Estate and Rental and Leasing

1.7%

18

Retail Trade

2.6%

27

Transportation and Warehousing

2.2%

23

Utilities

3.3%

34

Waste Management/Remediation Services

0.3%

3

Wholesale Trade

1.2%

12

Other (please specify)

19.1%

197

answered question

1029

skipped question

488

total

1517

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