By Valerie Bolden-Barrett

Money might still be the top motivator for most workers, but based on new reports from Willis Towers Watson (WTW) and global insurance broker Gallagher, companies plan to keep wage increases at or below the current 3% average by offering personalized benefits, bonuses and other variable compensation. According to Gallagher's 2019/2020 Salary Planning Survey, companies of all sizes and industries are looking for ways to attract and retain workers who aren't motivated by the highest salaries when job hunting. And WTW's 2019 General Industry Salary Budget Survey showed that while employers plan to hold the line on wage increases, others plan to modestly increase discretionary bonuses or add separate promotional budgets to reward top talent in 2020. 

 
Gallagher found that 32% to 35% of employers surveyed are reserving variable pay for executives and managers, while 22% to 25% are offering it to lower-level employees, including those eligible for overtime pay under the Fair Labor Standards Act. According to Gallagher, healthcare costs are a main reason why salary increases have capped at around 3%.

"Despite an extremely tight labor market, most employers are either not willing or fiscally unable to increase their fixed costs across-the-board by bolstering their salary budgets," said Catherine Hartmann, WTW's North America rewards leader. According to WTW, pay raises will continue to hover around 3% next year, but top performers can expect significantly higher increases than mediocre performers, said WTW.