Based on annual pay increase studies released by WorldatWork, Willis Towers Watson and Salary.com earlier this year, the average salary increase budgets will range between 2.8% and 3.0%. Stephen Miller, CEBS published and released a SHRM article on September 3, 2020 titled, “Salary Increase Budgets Decline for First Time in 12 Years.”
The Willis Towers Watson survey indicated that approximately three quarters of the companies plan to distribute performance bonuses in 2021. This survey projects bonuses to average 11% of salary for exempt employees and 6.8% to 5.6% for non-exempt employees.
We saw a softening of employee pay adjustments (COLA, General, and Merit) during this year due to the pandemic for our client organizations and businesses. We believe that our public (non-profit) clients will budget between 2% and 3% for 2021 pay increases and our private for-profit clients are planning for closer to 3%.
We have been pleased to see the resiliency of our clients during this very challenging year and we look forward to helping them navigate compensation planning in 2021 and beyond.