Vast Majority of North Carolina Employers Plan Salary Increases in 2021 Despite COVID-19
Survey of 540 Companies Representing 120,000 Employees Sheds Light on Future Pay
Capital Associated Industries, Inc. ® the member-based nonprofit that empowers North Carolina employers to create the best workplace for their employees has released the results of its annual statewide Wage & Salary Survey.
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Among the findings is a clear indication of the effects of COVID-19 but also the lengths to which employers are going to retain their employees. 73% of companies have given salary increases this year. Half of companies reported base pay increases between 3-3.99% in 2020, with projections of an increase to 58% of companies giving increases in 2021. That’s compared to increases of 3-3.1%, which has been the statewide trend over the last five years.
“The results of our survey provide actionable data for North Carolina employers as they develop post-pandemic pay strategies,” said Molly Hegeman, VP, Membership & HR Services at Capital Associated Industries. “We’ve conducted this survey for decades and were in fact surprised to learn that so many employers are providing increases, which is a stark contrast to what we saw in the wake of the Great Recession. Almost 50% of companies gave 0% increases in 2009.”
On average, organizations reported salaries are projected to increase 2.2 percent to 3.1 percent across all employees for 2021 – the former of which includes organizations giving zero percent. Those numbers are down only slightly from 2.5% and 3.6%, respectively in 2020.
Participants in the survey represent a number of industries, with Manufacturing (Durable and Non-Durable Goods), Professional and Business Services, Health Services, Financial Services and Education rounding out the top five. Seventy-four percent are small to mid-size businesses, with less than 200 employees.
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“We realize there are unique economic and financial circumstances across North Carolina employers,” added Hegeman. Several contributing factors that quickly come to mind are whether or not a company received a PPP loan, loss of revenue or had to stay closed longer than others.”
Other key findings from the survey include the following:
- Nearly 40% reported allocating a larger portion of their salary increase to high performers.
- Half of participating organizations adjust their salary range structure every 12 months, while 26% reported no formal timeframe.
- The majority of employers calculate salary increases against an employee’s base rate, with only 12% calculating increases against the midpoint of the range.
- Over the last several years, nonexempt and exempt employees have seen a steady increase in base pay, which dipped across the board in 2020.
- Executive pay is projected to increase less than expected due to a larger number of employers providing this segment no increase at all
While the majority of companies do intend to increase base salary pay next year, 26% have no plans to do so. That’s 3% higher than the 23% who did not provide pay increases at all in 2020, and 15% higher than 2019.
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