The Three Percent Annual Raise Will Remain Status Quo in 2019

PayScale’s Compensation Best Practices Report (CBPR) reflects trends and attitudes about compensation, benefits, retention and employee engagement across more than 7,000 employers.

Today, we released the latest edition.This year’s report reveals employers are more concerned than ever about retaining staff. Yet, HR and business leaders are reluctant to raise base pay in a significant way. Organizations hope to keep their employees by offering better training programs, development opportunities and benefits.

Here are the key findings from the 2019 Compensation Best Practices Report.

Keeping talent on board becomes a growing concern. More organizations (66 percent) in 2019 cited employee retention as a major concern when compared to responses from the previous year (59 percent).

Most employers have no plans to pay workers more. Despite robust corporate profits and lower taxes for businesses, few companies report planning a significant pay raise for most of their workforce; nearly 70 percent of respondents project base pay increases of 3 percent or less.

Organizations do spend more on certain positions. More than 40 percent of employers gave base pay increases of 10 percent or more for some jobs at their organization. These substantial raises were typically for highly competitive jobs, such as IT positions, where it is more difficult to attract employees with the right skill set.

[Related content: Learn how to set pay based on the skills employees have and the skills that matter to you ]

Organizations plan to improve benefits and perks to sweeten the total rewards package.

  • Fifty-nine percent of employers will invest more in training and development programs.
  • Forty-four percent plan to allow remote work (up from 39 percent last year) and 37 percent will offer flex time.
  • About one-third of companies will offer paid family leave in 2019, an increase of three points when compared to the previous year.
  • Prevalence of unlimited PTO has nearly doubled in recent years (9 percent of employers offered it in 2018 compared to just 5 percent in 2016).

Performance-based bonuses are prevalent. While increases in base pay are stagnant, many organizations (66 percent) plan to use bonuses in 2019, in an attempt to retain their top performers in competitive jobs. These bonuses are typically directly aligned with performance and broader company objectives. Hiring bonuses and employee referral bonuses are also fairly common in larger organizations.

For more information about how your salary budget and pay practices stack up against your industry peers, check out the full CBPR report on our website. Or, sign up to hear the key findings on our February 21st live webinar.


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