You land a job in a thriving industry, work hard and meet your carefully crafted annual goals, all of which matters more than ever if you’re hoping for a raise. But a new survey indicates that your location can have a real impact on how fast your pay increases.
According to human resources consultancy Aon Hewitt, its recent U.S. salary increase survey found that total compensation and spending for American employees reached a record high 15.8 percent this year. That includes an average 2.9 percent bump in base pay and a 12.9 percent increase in “variable pay” or things like bonuses, incentives and other cash rewards.
“Organizations are under immense pressure to keep costs in line to remain competitive, and as a result, we are seeing more than 90 percent of companies shifting more of their spending to variable pay because this type of strategy enables them to recognize and reward performance without growing their fixed cost,” said Ken Abosch, Aon Hewitt’s broad-based compensation practice leader.
Although job performance is clearly a key element for compensation, especially receiving bonuses, where you live has an impact on what you can expect for annual pay increases.
The survey indicates that the average salary increase will be about 3 percent for American workers in 2016, slightly up from this year.
But according to Aon Hewitt’s survey, these cities have an average projected salary increase that beats the national average:
- Washington, D.C.: 3.8 percent
- Dallas: 3.5 percent
- Minneapolis: 3.3 percent.
- Columbus, Houston and Seattle: 3.2 percent.
The news isn’t nearly as good in these cities, where salary increases will be less than the national average:
- Kansas City: 2.7 percent.
- Philadelphia and Charlotte: 2.8 percent.
- Rochester: 2.9 percent.
Aon Hewitt said the industries most likely to experience the biggest salary increases next year include telecommunications (3.4 percent), mining/milling (3.4 percent), insurance (3.2 percent) and automotive (3.2 percent). If you have a job in the energy field, education, health care or forest and paper products, your salary bump will likely fall below the national average of 3 percent in 2016.
Check out “The Good and Bad News About Next Year’s Pay Raises.”
What do you expect for a salary bump next year? Have you noticed an increase in variable pay in recent years? Share your comments below or on our Facebook page.