Salary Increases Are the 2013 Trend to Make Up for Inflation

This recession we are working to climb out of has been hard on a lot of people.  It’s been difficult for HR managers because of delivering the not so easy to swallow news of salary increase freezes.  Fortunately, there’s good news on the horizon.  According to the December 2012 edition of HR Magazine’s 2013 Trendbook, companies are unfreezing salary increases and increasing compensation.  To keep employees feeling like they are still getting a fair shake after receiving no salary increase over the past few years, several companies are employing various programs to “catch up” to inflation:

  •  Base pay increases
  • Bonuses for top performers
  • Short term incentive plans

 Base pay increases are meant to follow inflation and the continual hike in the cost of living.  People witnessed this at the gas pump and grocery store mostly.  When salaries can’t grow along with inflation due to tough economic times, employees have to make certain sacrifices to fill in the gaps.  Fortunately, employees at all levels may see base pay increases as high as 3% in 2013; according to Aon Hewitt, 2012-2013 Salary Increase Survey.  Top performers may see their base salary hike up an additional 1%.  With salaries for most companies taking up, on average, just below 50% of a company’s operating costs it might be hard to justify increasing those costs when salary increases just aren’t in the budget yet.  In this case, some companies are offering various types of incentive plans:

  • Companywide incentive
  • Profit sharing
  • Individual incentive
  • Business incentive
  • Team incentive

No matter the program you use to reward your employees for their loyalty during these tough times, they will appreciate the recognition of their sacrifices.  Be sure to ‘like’ my Facebook page for weekly updates on company trends and ideas to show your employees you value them!