» How much will the average raise be this year?

How much will the average raise be this year?

March 25, 2011 by Bob Hill
Posted in: Compensation, Human Resources, In this week's e-newsletter, Latest News & Views

A new study reveals how much the average company will be offering in terms of pay hikes (and other incentives).

The Towers Watson study, which included nearly 400 U.S. companies across a broad range of industries, found the average merit raise in 2011 will be approximately 3% (compared with 2.7% in 2010).

That represents the largest annual increase in merit raises since the financial crisis began back in 2008. Back in those days, companies averaged 3.5-4% merit raises a year, according to a recent CFOZone post.

What’s more: Companies are planning to hire, providing some much-needed relief to long-time employees, who’ve been forced to take on more responsibilities over the past few years.

Among the expected hiring trends:

  • 42 percent of companies are planning to hire workers for positions that require critical skills
  • 40 percent plan to add professional and technical workers, and
  • 25 percent plan to hire sales professionals and hourly workers this year.

Despite all the optimistic forecasts, more than a third of companies claim they’re still having trouble when it comes to recruiting top performers, many of whom have been able to maintain their employment throughout the crisis.

Source: Merit raises are coming back,” by Stephen Taub, CFOZone, 3/1/11.


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