The Year Ahead: Settling In
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It is tantamount to a new normal. When it comes to forecasting the percentage by which companies around the globe are planning to raise salaries, the numbers have held steady for the past four or five years. This can be good news or bad news, depending on your frame of reference. In the U.S., for example, the average salary increase is forecast to be 3 percent, a figure that has remained the same for the past five years. Prior to that, as the global recession raged, the numbers were lower. But going farther back, into the 1990s and the first decade of the 2000s, more generous raises abounded, often 5 percent or more.
Get used to this new period of austerity; it is common around the world, as the chart on the following page illustrates. But there are some unexpected surprises. Greece, a nation whose economy has been trying to recover, reported that about 70 percent of its companies are planning to give salary increases in 2017.
Beyond salary increases, we focused on target bonuses to get a sense of how companies around the world are parceling out compensation. We aimed our survey at three job levels: clerical, professional and manager, and measured the target bonus as a percentage of salary. Note that the country with the highest bonuses as a percentage of salary is India, where base salaries tend to be much lower than in other geographies. The same holds true in other emerging economies where there is fast growth and high demand for skilled workers—demand that outstrips supply.
Finally, we asked thousands of recruiters around the world to pick out the jobs for which they are having the most trouble recruiting. Topping the list by a wide margin is engineering. On average, more than 40 percent of the companies are having trouble recruiting engineers.