Mercer says U.S. employees can expect pay raises of 3 percent in 2015

Published August 11, 2014 by Paula C. Squires

Pay raises for U.S. employees are improving. That’s the news from Mercer’s 2014-15 U.S. Compensation Planning Survey.  Yet the raises lag behind the 4 percent year-over-year change Mercer found in the pay from long-term incentives for CEOS.

The average increase in base pay for employees in 2015 is expected to be 3 percent. That’s up slightly from 2.9 percent in 2014, 2.8 percent in 2013 and 2.7 percent in 2012.

Additionally, salary increases for top-performing employees — 8 percent of the workforce — will be higher as companies continue to focus on retaining and engaging top talent.

“Employee engagement and retention continue to be a top priority for employers,” said Mary Ann Sardone, a partner in Mercer’s talent practice and regional leader of the New York firm’s rewards segment. “As a result, employers recognize that they need to reward top-performing employees. And while pay is still most important, they’re continuing to provide rewards beyond compensation in the form of training and career development.”

Mercer’s most recent survey on compensation trends, which has been conducted annually for more than 20 years, includes responses from more than 1,500 mid-size and large employers across the U.S. and reflects pay practices for more than 16 million workers. The survey results are captured for five categories of employees: executive, management, professional (sales and non-sales), office/clerical/technician, and trades/production/service.

On the CEO side, Mercer's latest analysis of compensation and benefits for CEOs at 240 companies in the S&P 500 reveals CEOs earned a median total direct compensation package of $9.7 million with about two-thirds of that amount coming from long-term incentive grants. Pay in the form of long-term incentives climbed to a median of $6.5 million, or a median year-over-year change of 4 percent.