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PayScale Reveals Most Companies Only Raised Pay 1 to 3%

New compensation report shows many employees also won’t see a substantial pay increase in 2020, unless they’re highly skilled or holding a ‘hard to fill’ job

Seattle, WA – March 11, 2020  – PayScale, Inc., the leader in modern compensation data and software, today released the results of its annual survey, the 2020 Compensation Best Practices Report, which examines the trends and attitudes of employers pertaining to topics such as compensation, retention and employee engagement. The latest report shows retention is a top concern for employers, yet the majority of companies — 67 percent — awarded pay raises to employees that were just 3 percent or less. While the overall landscape for pay raises is bleak, this year’s report shows employers are utilizing compensation increases to attract highly skilled employees for the most competitive positions and industries in the talent economy.

“This year’s compensation research shows the common belief about stagnant wage growth is much more nuanced when we look at the compensation across specific jobs,” said Wendy Brown, Senior Director of Corporate Marketing at PayScale. “Companies are rewarding employees in jobs that are hard to fill with increased pay. However, employers who are concerned about retention across their organizations should look at raising pay in a meaningful way more broadly to ensure their entire workforce feels valued and employees are more likely to remain in their positions.”

The 2020 Compensation Best Practices Report analyzed responses from nearly 5,000 employers representing every industry across the U.S. Here are some other highlights from the compensation report:

  • Raises awarded were less than those in the budget. Overall, the pay raises organizations gave to their employees in 2019 were actually less than what they had initially allocated in their budgets. Forty-five percent of organizations planned to give pay raises of 3 percent or higher, however, only 38 percent actually did so.
  • Organizations challenged with retention. Retention is cited by employers as the top reason for adjusting compensation, followed by recruitment and paying for hot skills.
  • STEM positions remain hard to fill. Employers listed IT jobs as the toughest positions to fill across their organizations. In addition, companies in both the Technology and Engineering & Science industries were more likely than companies in most other industries to compensate higher for competitive jobs.
  • Tech jobs are a bright spot in talent market. Technology jobs were one of the few occupation families experiencing more than 3 percent annual wage growth at 3.2 percent. By contrast, jobs that showed the lowest annual wage growth were in HR (1.2 percent), Sales (1.2 percent) and Marketing & Advertising (1.7 percent).
  • Employees will leave for more pay. Compensation was cited as the second most common reason for employees to leave a company, behind personal reasons (such as family, marriage, school, etc.)
  • In demand skills can boost pay more than a degree. Seven out of ten companies prioritized hot skills over a formal education when they determined which employees or jobs would receive higher compensation.
  • Bonuses continue to be a trend. More than half, 54 percent, of all companies paid out bonuses at least once in 2019; similar to the results from last year regarding bonuses. The individual incentive bonus was the most popular type of bonus awarded by employers.
  • Leading companies know that pay matters. Top performing companies are more likely than average companies to increase base pay (90 percent versus 79 percent), award variable pay or bonuses (81 percent versus 77 percent) and be more transparent about their pay practices (79 percent versus 70 percent).
  • More companies focus on pay brand. To better address recruiting and retention challenges, 70 percent of organizations either have a compensation philosophy which incorporates the company’s business goals and labor market dynamics in place or are in the process of developing one.

For more information about PayScale’s 2020 Compensation Best Practices Report, please visit:

About PayScale:

PayScale offers modern compensation software and the most precise, real-time, data-driven insights for employees and employers alike. More than 8,000 customers, from small businesses to Fortune 500 companies, use PayScale to power pay decisions for more than 23 million employees. These companies include Encana, The New York Times, Sunsweet, T-Mobile, United Health Group, Wendy's and Perry Ellis. For more information, please visit: or follow PayScale on Twitter:

Press Contact:

Phyllis McNeice
Tel: 206-954-1481

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