LIVONIA – A
new survey shows employers are paying a 3 percent merit raise in 2015, the same
as the year before – the findings may indicate the need for employers to think
more broadly and proactively to properly lure and reward top talent.
The survey
comes from the American Society of Employers in its 2015 Compensation Survey
released Thursday.
“An average
3 percent merit raise appears to be on the low side given the increasing need to
retain well-performing workers, especially when considering the corresponding
findings that bonuses as a percentage of salary are up only slightly from last
year,” said Mary E. Corrado, president and CEO of ASE.
“However,
the survey findings should serve as a catalyst to companies to comprehensively
examine their approach to compensation and determine if they are being creative
and proactive. While fears of the financial fallout during Michigan’s deep
recession remain, employers need to take an in-depth look not only at their
wage and benefit levels, but their overall menu of reward practices to determine
if they are remaining competitive.”
A total
of 352 companies, 56 percent of them located in the metro Detroit
region, with an average of 752 employees and a median of 141
employees, responded to the survey, which was distributed to more than
2,200 human resource professionals via an online survey in January 2015. Nearly
two thirds (62.3 percent) of the respondents are classified as non-automotive
suppliers.
2015 ASE
compensation survey highlights:
Merit
budgets have not wavered in 2014 and 2015 from the standard 3.0% level that ASE
has seen for several years.
Among
companies who reported data in both 2014 and 2015, actual salaries increased
2.6% year-over-year. Further analysis of the data shows that salary
movement ranged from as low as 1.5% for Production and Maintenance
classifications (i.e., hourly) up to 3.0% for Supervisory, Managerial and
Professional (i.e., exempt) classifications.
The amount
of bonus as a percent of base salary has increased slightly, rising from 9.5%
in 2014 to 10.35% in 2015. Variable pay as a percent of base pay remains stable
at each level. Employees that are eligible for variable compensation could
reasonably expect short-term incentives of approximately 6.1 percent, 7.8
percent, 12.2 percent and 30.6 percent for the following annual salary levels:
$50,000 to $75,000; $75,000 to $100,000; $100,000 to $150,000; and more than
$150,000 respectively.
ASE
compensation survey findings on specific position classifications:
After
several years of robust growth, the rate of wage increases among engineering
classification has stabilized. Wage increases in this job family (2.9 percent)
are now more in line with overall survey averages.
Salaries for
legal support positions (i.e., paralegal and legal secretary) increased by just
2 percent in 2015, a slight improvement from less than one percent for those
same roles a year ago.
Design/drafting
positions are enjoying a 5.0% average wage increase, overcoming last year’s 0.0
percent average wage increase.
Average wage
increases for human resources positions have returned from a recent high of 4.5
percent last year to a more typical 3.1 percent.
