Tags: WorldatWork | raises | salary | US

WorldatWork: Raises in US Outpacing Other Nations

By Michelle Smith   |   Friday, 02 Aug 2013 10:42 AM

America's white-collar workers are getting bigger raises and their salary increases are outpacing those in other countries, according to WorldatWork, a human resources trade association.

Conversations about work in America are generally dominated by talk about unemployment and the prevalence of low-wage and part-time jobs. But, WorldatWork's recent survey adds some positive fodder to the discussion.

In 2013, the average raise for a white-collar worker is 2.9 percent, WorldatWork data reveal. That falls in line with forecasts from last year's national compensation surveys.

Editor’s Note:
75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

According to NBC, last fall, compensation expert and Towers Watson consultant, Ravin Jesuthasan, declared 3 percent raises "the new normal."

Some may argue that a 3 percent raise is little cause for celebration, but, according to the data, pay hikes are on upward trajectory.

In 2008, during the recession, many Americans only received 2 percent raises, NBC says a salary report from Bucks Consultant shows. And Fortune says WorldatWork cites the average pay increase in 2009 as 2.2 percent, which is 25 percent less than the raise workers are getting this year.

These trends of higher climbing salaries in the United States contrast those around the globe.

WorldatWork analyzes salary budget estimates from companies in 17 countries. In 2014, budgets are set to shrink in every country, except the United States. American workers are projected to receive another pay hike, averaging 3.1 percent.

Although some countries' pay increases may sound good, Kerry Chou, senior compensation practice leader for WorldatWork, says, "Salary budgets generally reflect what is going on in the national economy."

In India, for example, the average raise is 10.5 percent, but inflation of about 10 percent gobbles it up.

"Workers in the U.S. are experiencing more buying power, since the average 2013 salary budget increase is 2.9 percent while the annualized inflation rate, as of April 2013 when we collected the data, was only 1.1 percent," Chou adds.

Given the economic conditions, U.S. companies are still adamant about controlling fixed costs such as labor.

"I don't think anyone should expect merit increases to deviate that much going forward, even if the economy does well," Jesuthasan tells NBC.

However, compensation analysts are looking for companies to spend more on variable compensation such as bonuses as their earnings improve.

Chou says U.S. companies are also making an effort to find ways to reward valued employees.

According to WorldatWork, American workers will see more "increased differentiation based on performance."

As a result, "In 2014, high performers can expect a 4.1 percent average pay increase, compared with only 2.7 percent for middle performers (a 152 percent difference)," the WorldatWork report projects.

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

© 2015 Newsmax Finance. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved