Pay raises for U.S. workers should continue to rise, study says
The size of yearly pay increases for U.S. employees has increased steadily over the past couple of years, and they’re expected to go even higher in 2015, according to a new study from human resources consulting firm Mercer.
The average increase to base pay in 2015 is expected to rise to 3% from the 2.9% average experienced this year, according to the study. Released on Friday, the study’s findings are based on the pay practices of more than 1,500 mid-size and large companies that employ roughly 16 million workers in a variety of positions and seniority levels across the U.S.
Mercer looked at pay trends over a five-year period, finding that the average raise in base pay was 2.7% in both 2011 and 2012 before it increased to 2.8% in 2013. The rate jumped again this year and is expected to continue growing, with top-performing employees expected to get even higher raises as employers focus on retaining their best talent.
“Employee engagement and retention continue to be a top priority for employers,” Mary Ann Sardone, a partner in Mercer’s Talent practice, said in a statement. “As a result, employers recognize that they need to reward top-performing employees.”
Indeed, pay raises for employees rated highly by their employers are higher than average. Workers rated above average, a group that accounts for 36% of the workforce, received salary increases between 3.7% and 4.8% this year, according to the study. Those rated in the middle, about half the workforce, got raises of 2.6% while the lowest-rated 2% of workers received raises of only 0.1%.
The study also breaks down projected base pay hikes by industry, with the energy sector expected to hand out the highest average increases in 2015 at 3.5%. As Fortune has reported, another recent study ranked oil and gas extraction among the most profitable U.S. business sectors of the past year. The industry has been booming in the U.S. with increased crude oil and shale gas production helping the country reduce its reliance on foreign imports of energy sources.
Coming in behind the energy industry in terms of average projected base pay increase next year is the transportation equipment industry at 3.1%, while the consumer goods industry and services (non-financial) had the lowest expected raises at 2.8% each.