Expecting a bigger paycheck for 2014? You may be disappointed. Consulting firm Mercer’s annual survey, which reflects the payment practices of 1,500 mid-size and large U.S. employers, found that salaries will rise by 2.9%. That’s a very small climb from the 2.8% increase in 2013.
Why such little improvement? CNN Money reports that with the unemployment rate still at 7.6%, employers maintain the ability to hire and recruit employers with the same salary offers. A lower base pay also balances out increased costs of retirement and health care benefits.
The top performers will see the biggest average salary raise of 4.6%. Not only that, but almost half of all predicted raises will go to the top third of workers. Jeanie Adkins, partner in Mercer’s Rewards practice, told CNN that “employers recognize that their greatest challenge is to retain their top performers…they have to reward them.”
Despite the minor improvements in pay, only 3.7% of companies reported freezing their salaries, a significant step down from 2012, when 6.5% of firms froze wages. What’s even more promising, only 0.9% of companies expect to freeze salaries this upcoming year.