Despite an improving economy, American employers continue to be cautious with pay increases for employees.
Kerry Chou, a senior practice leader for WorldatWorks compensation practice, says that the American economy has been steady as she goes over the last two to three years. But, for 2014, preliminary data from the HR association states that U.S. employers increased their average total salary budgets by 3%.
The salary budgets are going up, [but] they are going up cautiously, Chou explains to EBN. From a recessionary stand point, this has kind of been the slowest recovery in a major recession ever, and the United States has just dragged and dragged.
In 2009, the employers reported an average total salary budget increase of just 2.2%, which was the lowest average annual budget increase since WorldatWork began tracking the compensation pulse more than 40 years ago. But now, the U.S. is showing more stability than other developed, industrialized countries, Chou explains. There has also been a major push at federal and state levels to increase minimum wage requirements.
If we look at the historical pay increases over the last three years, the United States is probably the only country that is showing consistent growth in their salary budgets; I think thats a real positive, Chou says. WorldatWork highlights that India, China and Brazil all averaged the higher salary budget increases at 10.5%, 8.2% and 7.2%, respectively, but Chou explains that these numbers might be offset by the rate of inflation in those economies.
Meanwhile, even as the U.S. economy and the stock market continue upward, Chou says there will not be any drastic surge in pay increases.
People are loosening the reins on their budgets, but they just continue to do it a little bit cautiously, he explains.
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