Northeast Ohio Keeping Up with National Pay Adjustment Trends

The 2013-2014 ERC Wage & Salary Adjustment survey results found an average projected pay adjustment of 2.9%- basically more of the same from 2013. The results from this local survey of Northeast Ohio employers are very much in line with national reports from organizations such as Hay Group and WorldatWork which repeatedly indicate that employers are hovering right around the 3.0% mark, much as they have for that past several years.

One bright spot here in Northeast Ohio is that out of the 139 participating employers only 7 indicated they are not giving any pay increases to their employees or a full 95% of employers that are providing increases in 2013. 2014’s numbers are shaping up similarly, with only 6 out of the 139 employers projecting that they will not give increases, again that’s 96% projecting increases for 2014.

As the chart below illustrates, in terms of the overall percent of employers providing increases, 2013 and 2014 (projected) have finally met and even exceeded the pre-recession levels. Seeing these adjustments continue to expand across the region’s employers is a positive sign for the region’s business community and in theory means these increases (even if small) are reaching a larger proportion of the total workforce as a result.

Percent of organizations that provided increases 2007-2013 (& 2014 projected)

Determination & dissemination

Additional research from ERC strongly suggests that the methods by which the pay adjustment percentages reported above are determined as also in-line with national trends. Based on ERC’s historical data trends for the Pay Adjustment & Incentive Practices survey, a strong preference for merit based pay adjustments continues in 2013’s results. Locally, cost-of-living raises were the least popular type of adjustment, coming in around the mid-teens for most employee types, while overall/across-the-board adjustments remained the second most common method used.

Over 80% of organizations provide merit based increases to their employees regardless of employee type, i.e. professional, executive, production, clerical, etc. Union employees are one exception, with only 45% of organizations using merit to set pay increases for that specific employee group. Reinforcing this move towards pay for performance on the national level, is Hay Group’s “Reward Next Practices” study, which found that a majority of organizations will continue to build on these programs for years to come. Nearly two-thirds even reported a focus on “improving key non-financial reward programs,” a move that reflects the need to look to performance in order to incentivize top performers in an era of largely stagnant pay adjustments.