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Companies plan to loosen purse strings on pay: New survey

Salaries are on the rise, and the amount of money being allocated to bonus pools will hit record levels this year, according to a new survey from human resources firm Aon Hewitt.

"The numbers are trending in a positive direction in terms of salary growth," said Ken Abosch, compensation practice leader at Aon Hewitt. "But they are still a far cry from 2007 when we were looking at 3.7 percent type of growth in salaries."

The survey of 1,064 companies found, on average, salaries will rise 2.9 percent this year, and 3 percent in 2015. Next year's increase will be the biggest since 2008.

Grazvydas | iStock | Getty Images

The largest surprise in the survey, according to Abosch, is the amount of money companies are putting into bonus pools. This year and next, the 91 percent of participating companies that hand out bonuses will put 12.7 percent of their payroll funds toward these payouts, the largest amount since the unit of Aon began the survey 38 years ago.

Abosch cites two factors for companies putting more money aside for variable pay. First, he said corporate performance is up and companies want to reward employees for the good performance. Second, the economy is strengthening and there is greater job creation, so they have to find ways to keep their costs in line while hiring the best talent.

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"That is creating a little tightening in the labor market," he said. "Companies want to reward for good performance and because they are unwilling to increase their fixed costs (salaries), they are turning to bonuses to do that."

Increasingly, the survey found industries that typically do not hand out bonuses are embracing this type of compensation. Abosch said that is because a lot of organizations find they have to look beyond their own industry to find the best talent for specialized jobs in areas like finance and technology.

The promise of a bonus can go a long way in persuading a person to take a job where the base pay may not be as great as in another industry.

Where you work will influence pay as well. The survey found that next year, workers in Denver and Houston can expect the biggest salary increases of 3.5 percent and 3.2 percent, respectively. Abosch said growth in the energy industry, fueled by the fracking boom, is behind these higher-than-average increases.

A steady supply of available workers will keep salary increases in New York, Minneapolis/St. Paul and Milwaukee under the average at 2.8 percent.

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Energy is the industry expected to increase salaries the most next year, up 3.8 percent, followed by real estate at 3.4 percent and telecom and pharmaceuticals each at 3.2 percent. The lowest increases will be in the paper and forest industry and government, both at 2.6 percent, and education at 2.7 percent.

—By CNBC's Mary Thompson

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