2020 Salary Increases

With the COVID-19 pandemic continuing in the U.S., it is no surprise that many companies have had to reevaluate their 2020 salary increase budgets. The recent WorldatWork Salary Budget Survey conducted in the spring of 2020 found that the average 2020 salary budgets are approximately 2.9%, down from projected budgets of 3.0% to 3.3%, which is the first time there has been a decline in salary budgets since the Great Recession. While the decline is due to the pandemic and economic uncertainty, the majority of companies are still planning some form of salary increases, even if lower than originally budgeted. In addition, 2021 salary increase budgets are also projected to be around 2.9%, possibly signifying a cautionary approach to increases during continued economic uncertainty. As many companies have become leaner these past few months, they will need to focus salary increases on top performers and key positions to ensure that they are both retaining and attracting the right talent.