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3% merit raises the new normal? Compensation focus moving towards total rewards

Media Contacts: Barbara Fornasiero, EAFocus Communications, 248.260.8466,; Wendy LoCicero, American Society of Employers (ASE), 248.223.8006,

ivonia, Mich. —June 13, 2016 — The American Society of Employers (ASE), one of the nation’s oldest and largest employer associations, released the organization’s 2016 Compensation Survey today. It’s the 64th year that ASE has published the annual survey. The findings were released by Mary E. Corrado, president and CEO of ASE.

The key number in the 2016 survey is a 3.0% merit raise, which is the same as in 2015 and 2014 and typical of the standard merit increase for several years prior when the economy was not as robust. Corrado says the 3.0% number and other 2016 survey findings make the case that employers are taking a total rewards approach to pay and benefits.

“3.0% merit raises have been the norm for a number of years now,” Corrado said. “While the bonus and variable pay rates reported for this year are generally the same as last year, they continue to be an important component of overall compensation. Consistent with what I’m hearing from ASE members, the data supports anecdotal evidence that employers are taking a wide range of factors into consideration as total rewards, and that can include insured benefits, paid time off, corporate culture and other organization perks.”

A total of 363 companies, 53% of them located in the metro Detroit region, responded to the survey, which was distributed to more than 2,200 human resource professionals via an online survey in January 2016. Nearly two thirds (62%) of the respondents are classified as non-automotive suppliers.

2016 ASE compensation survey highlights:
• Merit budgets are at the 3.0% level, a figure that has remained constant in ASE’s last several annual salary survey reports.
• Among companies who reported data in both 2015 and 2016, actual salaries increased 2.6% year-over-year. Further analysis of the data shows that salary movement ranged from as low as 2.4% for Production and Maintenance classifications to as much as 2.9% for Office, Clerical and Technical classifications.
• The amount of bonus as a percent of base salary has increased slightly, rising from 10.35% in 2015 to 10.49% in 2016. Variable pay as a percent of base pay remains stable at each level. Employees that are eligible for variable compensation could reasonably expect short-term incentives of approximately 6.3%, 8.3%, 12.5% and 25.7% for the following pay levels: $50,000 to $75,000; $75,000 to $100,000; $100,000 to $150,000; and more than $150,000 respectively.

2016 ASE compensation survey findings on specific position classifications:
• Several Engineering fields witnessed average wage increases of 4.0% and higher, with Software Engineering at 4.9% and Electrical/Electronic Engineering at 4.0%.
• Surprisingly, other Engineering fields are seeing average wage increases of under 1.0% or even a decrease in the average wage, with Design Engineering at 0.5% and Manufacturing Engineering at -0.7%.
• Medical positions are now enjoying an average wage increase of 2.8%, substantially higher than last year’s 1.0% average wage increase.
• Average wage increases for Human Resources positions remain stable at 3.0%.

To obtain a copy of the 2016 Compensation Survey, contact Kevin Marrs, Vice President at ASE, 248-223-8025 or The survey results will be discussed in detail at ASE’s 6th annual Total Rewards Compensation and Benefits Conference, to be held on Wednesday, June 15 at the VistaTech Center at Schoolcraft College in Livonia. Registration information is available here.

About the American Society of Employers (ASE) – a Centennial Organization
The American Society of Employers (ASE) is a not-for-profit trade association providing people-management information and services to Michigan employers. Since 1902, member organizations have relied on ASE to be their single, cost-effective source for information and support, helping to grow their bottom line by enhancing the effectiveness of their people. Learn more about ASE at