How much extra can you expect in your paycheck next year?
Employers say they'll dole out raises averaging 3% in 2014, virtually matching annual increases in 2013 and 2012, according to a survey of more than 900 mid- to large-size companies by compensation consultant Towers Watson out Thursday.
"Companies will grant increases to most of their workforce, even if they're only modest increases,'' says Laura Sejen,global rewards leader for Towers Watson.
Just 4% of companies surveyed said they plan no boost in employee pay. During the depths of the 2008 recession, up to 75% of companies said they were freezing wages, Sejen says.
Executives are expected to receive pay increases of 3.1%, managers and salaried workers, 3%. Hourly wage earners will average a 2.9% gain.
A 3% increase would outpace the 1.3% to 1.8% inflation forecast for next year on Wednesday by Federal Reserve Chairman Ben Bernanke.
Towers Watson found a wide disparity between 2013 pay gains of those rated as "stars" and those rated average performers. Those who received the highest performance ratings averaged raises of 4.3% to 4.5%. Average performers got 2.6% raises. But even below average performers received 1.3% raises.
Executives are likely to continue to be the best positioned to receive the biggest bonuses, both as incentives and as discretionary awards. Executives are expected to receive bonuses equal to nearly 42% of salaries in 2014, about the same levels they received in 2012 and 2013. Discretionary awards will be 18.2%, down from 18.5% in 2013 and 20.7% in 2012.
By Gary Strauss, USA Today