2018 Projected Merit Increases Stable at 3% in the US; India and China are Countries to Watch

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1 ADVISOR BLOG 2018 Projected Merit Increases Stable at 3% in the US; India and China are Countries to Watch AUTHOR Sarah Muy Associate Account Manager As organizations look further into 2018 and evaluate compensation programs, it is critical to ensure that pay is competitive in order to succeed in the war for talent. Companies need data that reflects trends in today s world not last year s. Pearl Meyer recently released the 2018 Compensation Planning Report, with a comprehensive outlook on almost 200 organizations and their anticipated compensation plans. Report Findings As in any given year, data varies as the workforce changes. For 2018, both small and large differences are seen throughout the report in comparison to Changes are more evident when looking across industry segments rather than looking at total numbers. Overall, 91% of the respondent organizations are planning a compensation increase program in 2018, which is a slight increase from 89% in April 2018

2 For organizations that are not planning a compensation increase program in 2018, the reasons include financial performance of firm, economic conditions, and current pay competitiveness of the workforce; each captured 20% of the respondents. Other was listed for 40% of respondents. While most companies will be offering an increase, once again, there was no movement in the amount of the overall U.S. projected merit increase, which remains at 3% and has not changed in the last three years. Moreover, the 2018 report indicates that most organizations do not approach merit budget funding differently based on employee category (non-exempt, exempt, management, and executive), as 86% of organizations have the same budgeted compensation increase percentage across all the employee categories. The survey report also looks at bonus plan goals, benefit program anticipations, business objectives, and other components of total rewards planned by employers Projected Merit Increases Stable at 3% in the US; India and China are Countries to Watch 2

3 2018 Projected Merit Increases Stable at 3% in the US; India and China are Countries to Watch 3

4 If your organization is making pay decisions for global employees, this year s report contains compensation planning data for 60 countries. Of the nations reported there are two countries to note: China and India. Both stand out in terms of the percentage of firms that expect a sizable adjustment to base compensation. For China, 67% of firms expect a greater than 6% adjustment to base compensation in 2018 and for India, 81% of firms expect more than a 6% adjustment. To give further context to the size of increases projected in India, 54% of firms report expecting a 10-15% adjustment to base pay. If your organization would like to participate in the upcoming 2019 Compensation Planning Survey, to be published this fall, please contact survey@pearlmeyer.com for more information. To purchase the current report, click here. About the Report Published annually, the Compensation Planning Survey is an excellent piece to add to your HR toolkit as you plan for the upcoming compensation cycle. The report contains data from almost 200 participants in various industries including aerospace and defense, banking, construction and engineering, and software, among others. The report also includes global data from 60 countries. Participants complete a questionnaire that includes compensation increase budgets, salary structure adjustments, and promotional budgets. Data is reported in aggregate form by industry and broken down by exempt, non-exempt, management, and executive employee groups. About the Author In her role, Sarah utilizes her experience in both survey work and reporting. Sarah is a graduate from the University of Maryland, College Park earning a B.A. double degree in Economics and Psychology. About Pearl Meyer Pearl Meyer is the leading advisor to boards and senior management on the alignment of executive compensation with business and leadership strategy, making pay programs a powerful catalyst for value creation and competitive advantage. Pearl Meyer s global clients stand at the forefront of their industries and range from emerging high-growth, not-for-profit, and private companies to the Fortune 500 and FTSE 350. The firm has offices in New York, Atlanta, Boston, Charlotte, Chicago, Houston, London, and Los Angeles Projected Merit Increases Stable at 3% in the US; India and China are Countries to Watch 4

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