Survey Predicts Modest Pay Budget Increases for 2012

October 26, 2011 ( – BLR’s 2012 Pay Budget Survey results suggest a marginal improvement in economic conditions from one year ago.

According to the survey results, the average planned merit increase for 2012 is 2.07%, while the average actual merit increase for 2011 was 1.87%.  

In last year’s 2011 Pay Budget Survey, employers reported their average planned merit pay increase for 2011 would be 1.98%, meaning the actual merit increases for 2011 were lower than anticipated for a second year in a row. 

Although the average planned merit increase for 2012 is an improvement over last year’s survey, expectations for 2012 still reflect a slow recovery, BLR said. However, according to the 2012 survey, the average planned general pay increase for next year is 1.35% compared with 1.18% given in 2011. The actual general increases for 2011 were 1.29%, which exceeded expectations. 

The average planned merit increase (defined as a higher wage rate paid to an employee on the basis of agreed on criteria such as efficiency and performance) is 2.2% for exempt employees and 2.1% for nonexempt office employees, a slight improvement over the 2011 planned increases of 2.1% for exempt and 2% for nonexempt. 

This year, East Central employees can expect higher raises than last year. The average planned merit increase for exempt, nonexempt office, and nonunion plant is 2.2%, up from 1.7% in 2011. The Northeast/ Mid-Atlantic Region, which reported 2.2% for 2011, has reported 2.3% for 2012, and remains the region with the highest planned merit increases for exempt, nonexempt office, and nonunion plant employees. 

The survey also found that employers in large metropolitan areas (with a labor market of over 500,000) are planning 2.4% average merit increases for exempt and 2.3% for nonexempt employees. Those in non-metro areas (labor market of under 500,000) are planning average merit increases of 1.7% for exempt employees and 1.6% for nonexempt employees. 

A total of 1,637 organizations participated in the survey, which was conducted in June 2011. 

Click here for a complete copy of the report.