Workers can expect pay raises this year and next of 4.2 percent, roughly equal to annual pay hikes they’ve been getting, according to a new survey.
Their bosses can expect raises this year of 4.4 percent and next year of 4.3 percent. That’s according to preliminary results of a compensation planning survey conducted by William M. Mercer Inc. of 900 mid-size to large companies.
Salary increases in recent years have been running about 4 percent, the consulting company said.
Those salaries are far above inflation, running at 1.4 percent for the first half of 1997.
But the pay hikes would be larger if more companies weren’t adopting variable pay programs, Mercer said. With variable pay, firms replace a portion of annual salary increases with performance incentives.
“The need to recruit and retain employees at a time of declining unemployment - especially professionals and high-tech workers - puts upward pressure on compensation,” said Charles M. Cumming, a Philadelphia-based consultant working with the survey.
The results of an expanded survey of 2,000 companies will be released in late August, but the company said the full results typically do not vary from the preliminary findings.