The American economy continues to get past the depths of the last recession, but slow-to-no growth in wages may hold progress back. This was the trend in 2012, but research from MoneyRates.com found that figures did not change too much last year either. Out of 1,200 participants, about 56 percent of them saw their salaries remain the same, while 12 percent were notified they should expect a pay cut.
“The labor market is still quite slack, leaving most employees in a weak bargaining position,” MoneyRates Senior Financial Analyst Richard Barrington told Business Insider. “This slackness can be seen in the fact that the unemployment rate is still quite high at 6.7 [percent] and also in the trend away from good-paying manufacturing jobs and toward lower-paying service jobs.”
Employers that continue to feel the pangs of low inflation and slow growth in 2013 will have to think of creative ways to instill confidence in their staff, despite the fact that many of them won’t be getting paid more. This could be achieved through additional perks or flexibility in their work flow, but some effort may be necessary, as not giving staff members a pay raise may impact their motivation and overall productivity.
On the other hand, not everyone was left with immobile financial growth. Respondents who did get a raise only saw an increase of 3 percent or less.
If your company is trying to decide if pay raises are feasible in the 2014 fiscal year, utilize HR software solutions to decide who is qualified and which metrics to use to calculate the raise. Human resources departments that use HR software are able to quickly access payroll systems, identifying exactly how much money can be allocated to raises.