A new survey from Aon Hewitt reveals compensation budgets are expected to remain flat in 2017 despite strong competition in the job market.
Across 1,074 surveyed companies, base pay is expected to increase 3 percent in 2017, on par with 2.8 percent growth in 2016. Variable pay is expected to remain unchanged from 2016, at 12.8 percent of payroll, according to Aon Hewitt.
"Challenging business conditions and strong global competition this year means many companies are holding the line on compensation spending in the year ahead," Ken Abosch, broad-based compensation leader at Aon Hewitt, said in a statement. "However, as the job market continues to improve, stagnant compensation spending could leave many companies in a difficult position in the war for top talent. Organizations may need to either re-think their compensation strategy, or emphasize the other benefits and perks they provide as a way to attract and retain the best workers."
Creating a competitive compensation strategy and benefits package will be a way employers can stand out to prospective hires next year. Another survey by Aon Hewitt found 44 percent of U.S. workers are actively seeking another job, and fair pay is a top driver of turnover. Only 38 percent of workers feel they are fairly paid, according to the survey.
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