According to the business consulting firm Mercer, 98 percent of the 1500 employers included on a recent survey plan to increase employee pay in 2013. Salary increases are expected to be up by 2.9 percent, an increase from 2011 and 2010.

CNN Money reports that pay raises will not, however, be uniform across the board. Workers designated as top performers are expected to get larger compensation increases than average workers. Some top workers can expect increases as high as 4.5 percent while average workers, approximately 54 percent of the workforce, can expect to see a more modest 2.4 percent increase in wages. Other workers could expect as little as 0.1 percent.

Catherine Hartmann, Mercer’s head of compensation consulting business says, “Employers continue to recognize that in order to attract and retain top-performing employees, they’re going to have to reward them in line with industry dynamics.”

Of course increases also vary by industry. Wealthier industries which continue to enjoy high profits are more able to offer pay increases while areas like education and healthcare that continue to show less growth offer more modest increases to worker’s compensation packages.

The survey by Mercer also predicts fewer salary freezes and cuts. Mercer’s survey indicates that 2013 could be the third year in a row that employers relied less on cuts and freezes. Mercer said of the companies surveyed, just 1.5 percent expect to freeze salaries in 2013. In addition, predictions show that other benefits such as signing bonuses, spot cash rewards and bonuses for meeting goals may return for many employees.

Preparing for increases in payroll is generally part of annual planning for all corporations, including small and mid-sized firms. Projections of growth and expectations of larger profit margins allow for payroll planning and increases in employee compensation packages. The expected increase in payroll indicated in Mercer’s business survey is a potential indicator of overall growth and a sign of economic recovery.

Payroll represents one of the largest expenditures of income for most companies and is one of the first areas of cutback during economic downturn. Projections of payroll increase may offer some glimpses at recovery.

If you need help managing your company’s payroll or need expert advice today, call the experts at DirectPay Payroll at 704-921-2730 or check out their website at www.directpaypayroll.com. DirectPay is a full service payroll, tax and HR firm that can serve all your company’s needs. Call today!