A new survey of U.S. employers finds that merit increases are expected to increase slightly this year, thanks to those incremental signs that the economy and job market are finally improving.
The Towers Watson survey of large and mid-sized U.S. employers found that companies are budgeting for merit increases of around 3 percent this year, up from 2.7 percent in 2010.
That’s still below the 3.6 percent increases that employers budgeted for in 2008, according to Towers Watson, a professional services company.
Some of these companies also are hiring. About 40 percent of employers surveyed said they planned to hire for positions that require skills critical to make their company competitive. About the same amount said they plan to add professional and technical workers.
About one-fourth are adding sales and hourly workers, according to the Towers Watson survey.
Despite the millions of unemployed folks out there, more than half of the companies surveyed said they were having trouble finding employees with critical skills. Thirty percent said they were having trouble holding on to these critical employees.
The survey of 381 companies was completed in January and February of this year.