The median projected percentage change for total salary budgets from 2020 to 2021 is an increase of 3.0%, according to XpertHR’s 2021 Salary Budget Survey of 460 US employers. This increase matches the actual median percentage change for total salary budgets from 2019 to 2020.
In fact, when looking at the median percentage changes in salary budgets for individual employee groups, projected increases from 2020 to 2021 are all the same as the actual increases from 2019 to 2020.
The median projected percentage change from 2020 to 2021 for salary budgets for exempt workers is an increase of 3.0% (unchanged from the actual 2019 to 2020 increase), compared with an increase of 2.5% for nonexempt workers (unchanged), and an increase of 2.5% for officers/executives (unchanged).
“The results show that while COVID-19 has shaken the economy in 2020, employers, by and large, are planning to keep wage increases for 2021 level with those given out this year, rather than reducing raises,” says Andrew Hellwege, Surveys Editor, XpertHR.
Additionally, the survey shows that recruitment/retention plays a large role in keeping 2021 wages afloat despite a difficult 2020. When asked whether 12 various factors (such as the economy, health care costs and worker productivity) would exert upward pressure, downward pressure, or no pressure at all on their organization’s 2021 total salary budget, a majority of respondents (61%) cited recruitment/retention as an “upward pressure” – topping the list of positive influences.
On the other hand, the economy was the number one “downward pressure,” with 43% of organizations reporting this as a negative influence on next year’s total salary budget.
“While the rough economy is clearly a factor in organizations’ calculations for wage increases for next year, so too is recruitment and retention, and employers appear focused on ensuring they’re poised to attract and retain talent heading into 2021,” says Hellwege.
