Survey: Salaries expected to remain flat, hiring expected to remain at 2013 levels

Oct 09, 2013

A new survey finds that projected 2014 growth in base pay for employees is stalled at an average of 3%, unchanged from 2013, and roughly one percentage point below pre-recession levels.
 
The survey by Buck Consultants shows that employees with skills in information technology and the medical profession received higher-than-average base pay increases in 2012 and 2013, a pattern that is expected to continue in 2014, the survey said.
 
For the seventh annual “Compensation Planning for 2014” survey, the consulting firm collected data from 329 public and private organizations across industry segments and revenue ranges. Key findings include:
  • Short-Term Incentive Compensation: Fewer employees received STI compensation in 2012, the last full year that data was available, “with the notable exception” of the chief executive officer and lower level employees. Fewer managers and lower level employees are expected to receive short-term incentive awards in 2014, and the amount of the awards is expected to be lower than the actual 2012 payout. For CEOs, STI compensation is, on average, about 83% of base salary. For other C-suite executives, the STI percentage of base pay, on average, is about 57%. According to the survey, 87% of respondents grant short-term incentives.

  • Long-Term Incentive Compensation: Except for CEOs and other high level employees, the prevalence of new hire LTI awards is expected to drop in 2014. Ongoing LTI awards are projected to increase slightly in 2014 for CEOs and other senior executives and managers and to decrease slightly for most other employees. A reported 38% of respondents have broad-based LTI programs.

  • Pay-for-Performance: A majority of respondents (80%) said that they have a pay-for-performance philosophy. Of the 80%, 52% said their policy has five performance rating levels. Employees rated at the highest level received pay increases averaging 4.3%, down from 2011's 4.8%. By population, just 7% of employees were rated at the top of the five-point scale.