Expected 2016 HR Pay Raises Trail Others

Average HR salary increases coming in at 2.3%, below other skill sets

By Stephen Miller, CEBS Oct 12, 2015
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With the U.S. unemployment rate hovering around 5.1 percent, nearly the lowest it has been in almost a decade, job seekers with in-demand skills are being more particular about where they want to work—and for how much money. Yet base pay increases for employees overall are expected again to be modest next year. That may be even more true for HR practitioners in comparison with other professionals, new salary survey findings reveal.

While recent pay surveys have projected that 2016 salaries will be budgeted to increase around 3 percent, the newly released 2016 Salary Guide from talent acquisition firm Adecco Staffing USA suggests that those predictions may be skewed upward.

“If we look holistically across the U.S., we are seeing somewhere between a 2.3 percent to 2.5 percent overall annual increase in base pay for 2016, including merit increases. That’s the average,” Sherry Dixon, senior vice president for the southern division at Adecco Staffing USA, told SHRM Online.

“We certainly see differences based on skill sets, experience level, and roles and responsibilities,” she noted. For skilled professionals, “we’re seeing increases fall somewhere between 2.3 percent to 3 percent overall,” with regional variations. “The Northeast and California are more likely to see larger salary increases, as are major metropolitan areas that don’t fall within those geographic territories,” she pointed out.

Focus on Retaining Top Talent

Researchers are seeing lower pay increases overall despite declining unemployment rates, added Dixon, who is based in the Raleigh-Durham, N.C., area. “As we transition into an employees’ market, as opposed to an employers’ market, we’re still not seeing the pay increases rise at the same level that unemployment rates are declining.”

As for why pay increases remain so modest, “it really goes back to the budgets, and a focus on retaining top talent as opposed to retaining the overall workforce,” Dixon noted.

For this reason, “Once [employees are] starting to resign or share that they are looking, we are seeing employers being more willing to entertain counteroffers to retain top performers,” Dixon said. “We’re typically seeing somewhere between 5 percent to 7 percent from a retention perspective, which is not out of line with what you’d have to pay for a new hire; it’s not out of line with what your competitors are offering” to attract your top performers.

HR Salaries Trailing

As for HR professionals, “in 2016 the average increase is coming in at 2.3 percent, which is a modest pay increase in comparison to other skill sets across the country,” Dixon noted, and slightly below the 3 percent overall average increase expected for skilled professionals.

While she had no definitive explanation, Dixon suggested that HR professionals may be viewed as part of the middle layers of an organization, which are tending to get squeezed. “Those dollars that may have been spread across three to four layers are now being spread across five, six or seven layers,” she said.

Projected 2016 HR Salaries

At midsize companies, Adecco is forecasting the following average base pay for HR professionals across the U.S. next year.

HR Generalist

HR Recruiter

HR Corporate Recruiter

HR Manager

HR

Director

Northeast

$56,017

$64,035

$75,168

$101,872

$176,023

Middle Atlantic

$55,775

$63,831

$74,972

$101,192

$174,829

Midwest

$55,239

$63,673

$74,426

$101,074

$165,754

South

$53,697

$60,376

$73,264

$100,610

$165,521

West

$56,294

$64,583

$75,802

$103,739

$176,812

Source: Adecco Staffing USA.



New-Hire Pay Is Up

Among other key findings, employers are increasingly willing to pay more to attract new hires, Dixon said. “They are looking to bring in new talent and want those fresh ideas, so we are seeing spikes in starting compensation. While companies still have pay grades or pay bands, depending on the organization, they are more willing to negotiate starting salaries and offer flexible benefits.”

In another trend, “as we continue to work with Generation X, Generation Y, the Millennials, recognition is becoming more critical. We are seeing individuals who want responsibility and autonomy, to be able to drive results within their role. In addition, they want recognition based on that ownership.”

Bonuses Play Larger Role

While Adecco’s research focused on base pay, Dixon acknowledged that bonuses are increasingly becoming a larger share of overall compensation. “It’s not so much sign-on bonuses, which are not as popular as they were several years ago. But we’re seeing growth in bonuses as part of the overall compensation package that’s tied to performance of the individual and the company, frequently paid out at the end of the fiscal year.”

Performance-based bonuses “can range anywhere from 5 percent to 20-plus percent,” she noted, “unless you start looking at executive compensation, and then obviously those numbers grow exponentially from there.”

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter ​

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