Aon Survey Predicts 2019 Decrease in Cash Compensation

Piggy BankSalary budgets among U.S. companies continue to increase, but at a very slow pace. Aon’s 2018 U.S. Salary Increase Survey projects an increase in the salary component of base payroll to 3.1 percent. At the same time, the variable pay component (incentives, sign-on bonuses, special recognition) is projected to drop to 12.1%.

The net effect is a decrease in total cash compensation to U.S. employees from 15.5% to 15.2% of payroll. According to Ken Abosch, broad-based compensation leader at Aon, “ Employers are putting more behind an initial higher salary in an effort to be more attractive in recruiting talent.” The implication is that more salary dollars up-front may impact longer-term earning opportunities.

Other findings from the survey:

  • Expected minimum wage increases and regulatory changes are are having a negligible effect on budgets. 99% of respondents anticipate not changes following minimum wage increases due to the Tax Cuts and Jobs Act. 71% of companies report no changes in salary increases for employees who earn above the minimum wage.
  • Employees in high cost cities like San Francisco, Los Angeles, Houston, and New York City are likely to see higher increases in both base pay and variable pay.
  • Pay increases are accelerating slightly faster in the construction and insurance sectors. Employees in the Education and Tansportation sectors are likely to see lower-than-average increases in salaries.

Aon, PLC is a global professional services firm providing risk, retirement, and health solutions. There’s more information about the survey on their website.


Press Release: Total Cash Compensation for U.S. Employees Projected to Decrease in 2019, Aon Media Center, 9/24/2018