It won’t rock your world, but it’s something.
Base pay raises next year for the rank-and-file will be 3% on average, according to a survey of 1,100 mostly large employers by professional services firm Towers Watson. Executives and managers are projected to receive about the same.
A 3% raise — which is on par with the average raise in 2015 — won’t let you loosen the purse strings too much. But it’s still well ahead of inflation, which was just 0.1% in June, or 1.7% if you exclude food and gas prices.
“To a large extent, 3% pay raises have become the new norm in corporate America. We really haven’t seen variation from this level for many years,” said Sandra McLellan, North America practice leader, Rewards, at Towers Watson.
But as in recent years, top performers will make out way better than lesser ones. The very best employees can expect an average raise of 4.6% next year versus just 2.6% for average players. And workers with below-average ratings? They’ll see a pay bump of less than 1%.
And there’s some good news: The survey found that only 1.9% of companies are not planning to offer any raises at all in 2016. That’s down from 3% this year.
That’s a refreshing change from the depths of the Great Recession in 2009, when nearly a third of companies decided to forego raises altogether.
Of course, your total compensation for 2016 may also get a boost from a bonus on top of your raise. Most large employers offer both.
Those surveyed projected an average bonus payout of 17.4% for executives, 8% for managers and 4.9% for non-managers who are exempt from overtime. For salaried workers who are eligible for overtime, they can expect a 4.1% bonus on average, while hourly workers are projected to receive 3.7%.
It will be interesting to see whether employers’ plans for raises and bonuses will be affected at all by other pay-related developments, such as the increase in the minimum wage in many states, a proposed change to federal rules that will expand the number of workers eligible for overtime and greater scrutiny of who should be considered a benefits-eligible employee instead of an independent contractor.
