Merit Increases Projected to Rise!

A survey by Towers Watson indicates employers are looking to provide the biggest merit increases since the start of the financial crisis.

I think it will surprise most people to know that the projected increase is 3%.

Typically, when I speak to friends and family about their annual increases, they feel slighted by less than 10%. The national norm has been around 3% for as long as I have been doing compensation reviews. According to an article by Stephen Miller, editor of SHRM, the largest merit increases from before the crisis were 3.5% to 4%.

Still, the increase to 3% from 2.7% in 2010 is substantial and is definitely good news.

In addition to the uptick in merit increases, companies are beginning to thaw wage and hiring freezes. The percent of companies expecting to implement wage freezes is also down, although they hover around 12-13%.

I think the best news is that hiring freezes are thawing with 42% of survey respondents planning to hire for positions requiring critical skills, 40% planning to add professional and technical workers, and 25% planning to hire sales and hourly workers.