WAGE TRENDS REPORT

Transcription

1 WAGE TRENDS REPORT SEPTEMBER 2018

2 Page 2 INTRODUCTION Welcome to MBL Group's Wage Trends Report. For the past 20 years, MBL has been pleased to provide a complimentary review of actual and projected base salary and pay structure increase trends. For the past four (4) years, base pay increases have been at 3%. Projections for 2019 are that organizations will break through the 3.0% level slightly, to 3.2% for overall salary increase budgets. Pay structure movement has consistently increased since For 2 years in a row, pay structure movement has hovered at 2.1%. Projections for structure movement in 2019 remain at the 2.1% level. National & Local Trends Update Every year since 1999, MBL Group has collected compensation trend information and published our complimentary Wage Trends Report to assist our clients and friends in their budgeting, salary review and planning processes. This year's data summarized has been compiled from the following sources: Bureau of Labor Statistics Conference Board Empsight International Economic Research Institute (ERI) Kiplinger s Finance Mercer Milliman, Inc. SHRM Willis Towers Watson WorldatWork

3 Page 2 HISTORICAL PERSPECTIVE 10-YEAR LOOKBACK ON SALARY BUDGETS & STRUCTURE INCREASES COMPARED TO CPI AND UNEMPLOYMENT 10.0% % 6.0% 4.0% 2.0% 2.5% 3.9% 3.2% 2.1% 0.0% -2.0% Salary Budget Increase Consumer Price Index Salary Structure Increase Unemployment SOURCE: WORLDATWORK SALARY BUDGET SURVEY For the first time in four years, the total salary increase budget breaks through the 3.0% log jam. This year, employers across the country and projecting salary increase budgets between 3.1% to 3.2%. Finally, a little head room! According to the Bureau of Labor Statistics, the US rate of inflation rose from 2.2% to 2.5% for the period April 2017 to April The unemployment rate continues to improve for the same 12-month period to 3.9% in 2018 down from 4.4% in This is the lowest the unemployment rate has been since Despite the improvement in unemployment and the passage of the Tax Cuts & Jobs Act of 2017, survey results show that fewer than 5% of organizations plan to pass those tax savings on to employees in the form of salary increases. That said, salary increase budgets are increasing, even if it is only at a nominal rate.

4 Page 3 SALARY BUDGET INCREASE TYPES 4- YEAR NATIONAL TRENDS Organizations budget salary increases in a variety of ways. The majority of organizations today utilize merit (performance) based increases as the preferred method for annually adjusting salaries of staff. General increases / COLA and Other Increases are also utilized, but to a lesser extent. National Projected 2019 General Increase / COLA 1.4% (n=1,011) 1.4% (n=961) 1.5% (n=1,057) 1.8% (n=829) Merit Increase 2.7% (n=5,802) 2.8% (n=5,154) 2.8% (n=5,401) 2.9% (n=4,975) Other Increase 0.9% (n=1,691) 0.9% (n=1,536) 0.8% (n=1,711) 0.9% (n=1,497) Total Increase 3.0% (n=6,288) SOURCE: WORLDATWORK SALARY BUDGET SURVEY 3.0% (n=5,635) 3.1% (n=5,909) 3.2% (n=5,425) PLEASE NOTE IN THE CHART ABOVE, THAT THE THREE CATEGORIES OF INCREASES DO NOT ADD TO TOTAL INCREASE. THIS IS BECAUSE NOT EVERY ORGANIZATION UTILIZES ALL THREE INCREASE TYPES.

5 Page 4 OVERALL SALARY / BASE PAY INCREASES 6 -YEAR NATIONAL TRENDS 3.5% National Base Pay Increase Trends 3.3% 3.1% 3.1% 3.2% 3.0% 3.0% 3.0% 3.0% 2.8% REGIONAL SALARY /BASE PAY INCREASES Portland Oregon Metro % 2.8% % 3.0% % 3.0% % 3.0% % 3.2% Forecasted % 3.2%

6 Page 5 STRUCTURE / RANGE MOVEMENT 6 -YEAR NATIONAL TRENDS 2.5% National Pay Structure / Range Movement Trends 2.0% 1.9% 1.9% 1.9% 2.1% 2.0% 2.1% 1.5% REGIONAL STRUCTURE MOVEMENT Oregon Portland Metro 2014 n/d 1.8% % 2.1% % 2.0% % 2.0% % 2.0% Forecasted % 2.1%

7 Page SALARY / BASE PAY INCREASES BY INDUSTRY REGION: PORTLAND Projections Banking / Insurance 3.8% Banking / Insurance 3.1% Government / Education 2.9% Government / Education 3.5% Healthcare 2.9% Healthcare 3.2% Manufacturing 3.2% Manufacturing 3.8% Nonprofit 3.2% Nonprofit 3.4% Services 3.6% Services 3.2% Public Sector 3.1% Public Sector 3.7% Private Sector 3.2% Private Sector 3.4% ALL INDUSTRIES COMBINED 3.2% ALL INDUSTRIES COMBINED 3.5% STRUCTURE MOVEMENT/TRENDING BY INDUSTRY REGION: PORTLAND Projections Banking / Insurance 2.0% Banking / Insurance 2.3% Government / Education 1.9% Government / Education n/d Healthcare 1.8% Healthcare 2.0% Manufacturing 2.3% Manufacturing 2.9% Nonprofit 2.0% Nonprofit 2.0% Services 2.6% Services 2.7% Public Sector 2.3% Public Sector 2.2% Private Sector 2.0% Private Sector 2.5% ALL INDUSTRIES COMBINED 2.2% ALL INDUSTRIES COMBINED 2.4%

8 Page 7 VARIABLE PAY 3 -YEAR TRENDS Nationally, 85% of organizations surveyed utilize variable pay plans in their total compensation strategy. Variable pay is defined as the percent of payroll designated by the organization to award to employees for performance based, lump-sum, short-term cash awards during the plan year. These awards typically include formal plans such as organization-wide awards, business unit awards, and/or individual awards. Variable pay plans specific to sales incentive awards or cash awards for recognition are excluded from the data below. Western US Non-Exempt Hourly Nonunion Nonexempt Salaried Exempt Salaried Officers/ Executives 2017 Average percent budgeted 5.4% 6.0% 13.1% 40.8% Average percent paid 5.4% 6.0% 13.1% 42.7% 2018 Average percent budgeted 5.4% 6.1% 13.3% 41.3% Projected percent paid 5.5% 6.3% 13.5% 43.2% 2019 Projected percent budgeted 5.4% 6.0% 13.2% 40.9% SOURCE: WORLDATWORK SALARY BUDGET SURVEY Types of Variable Pay Programs % of Organizations Combination awards based on both organization/unit success & individual performance 69% Organization-wide awards 29% Individual incentive awards 22% Unit/strategic business unit awards 16% SOURCE: WORLDATWORK SALARY BUDGET SURVEY

9 Page 8 MBL Group, LLC STRATEGIC HUMAN RESOURCES SOLUTIONS MBL Group designs human resources solutions targeted to meet your business goals. Over 90% of MBL s consulting work is in the compensation arena, including the design and delivery of base pay and performance management programs, custom survey development, total compensation assessments, as well as creation and implementation of profit sharing plans, management incentive plans, and commissioned sales plans. For over 25 years, MBL has been a trusted partner to clients across all sectors and industries, including healthcare, technology, retail, manufacturing and services companies, as well as nonprofit organizations. MBL works with you as a partner. We work to understand your business, mission and values and produce results that meet your goals and budget. Regardless of size or scope of the project, our focus is on adding value for your organization, whether that is working with you to design compensation systems, help you find the right fit in an executive search or providing coaching to a key employee. We earn trust by delivering results and being a responsible steward to all of our clients info@mblgroup.com