Despite gradual improvement in the unemployment rate over last three years, pay-increase budgets have stagnated in the U.S. manufacturing and distribution sectors, according to a new survey.
Compdata Surveys’ 2013 Compensation Data Manufacturing & Distribution Survey found that U.S. manufacturers’ and distributors’ pay-increase budgets have risen negligibly, from 2.7% in 2011 to 2.9% this year, and that figure is expected to remain at 2.9% for 2014.
“Stagnant increases have become the norm over the past few years for many employers who remained conservative through the recession,” Compdata VP Amy Kaminski said. “Now, with predictions of a more mobile workforce, companies may need to re-examine the competitiveness of their compensation programs in order to retain skilled workers.”
Pay increase budgets vary slightly by industry, according to the Compdata poll. Electrical and electronic manufacturers reported pay-increase budgets of 3.0% and expect a slight increase to 3.2% next year. Transportation equipment manufacturers reported a budget of 2.7%. Paper and printing manufacturers reported a 2013 pay increase budget of 2.4%.
How Budgets are Used
Employers use pay-increase budgets to give employees raises such as merit increases, market adjustments, and promotional increases. According to the survey, 78% of manufacturers and distributors are using pay-increase budgets to grant merit increases to employees, and the reported average merit increase budget this year was 2.8%.
Twenty-seven percent of participating organizations use the pay-increase budget for market adjustments, and 30.7% use them for promotional increases. Eleven percent of the respondents allocated part of the pay-increase budget to cost-of-living adjustments; the average cost-of-living adjustment was 2.3%.
For Compdata’s 2013 survey, data was collected from more than 20,000 companies across the United States. More than 150 industry-specific job titles and 450 benchmark titles ranging from entry-level to C-suite were surveyed. For more information about the survey, go to www.compdatasurveys.com/compensation/manufacturing.