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Companies are showing a steady hand in salary planning in the midst of the global pandemic, according to’s annual U.S. and Canada National Salary Budget Survey with the 2021 median salary increase budgets expected to remain flat at 3.0% for the 10th consecutive year. The survey was completed by, the leading SaaS provider of cloud-based compensation market data, surveys and analytics, in June of 2020.

The average 2020 actual merit increase of 2.3%, however, fell from a 2.6% increase in 2019 and is substantially lower than the 2.6% increase that was predicted for 2020 in last year’s survey. The drop in the 2020 average merit increase clearly reflects COVID-19’s impact on the economy. The projected recovery to an average 2.6% merit increase next year indicates that employers are optimistic about an economic recovery in 2021 and hope to restore some lost pay as a result.

Salary structure increases are following a similar trend in the face of the economic recession and historically high unemployment rates. After hovering in the 1.7% – 2.0% range for most employees in 2018 and 2019, the average salary structure increase fell to the range of 1.3% – 1.6% in 2020 and are generally expected to stay the same in 2021. Median salary structure increases, however, are staying relatively stable at 2.0% for most employees.

Performance-Based Pay Projected to Remain Consistent with Pre-Pandemic Levels

The survey also tracks changes in variable/performance-based pay as a percentage of base pay and, again, found planning to be largely in line with prior years, across all employment levels.

“Much to our surprise, in 2020 the average variable pay as a percentage of base salary remained consistent with previous years, and as of June 2020, was projected to remain consistent in 2021,” said Chris Fusco, Senior Vice President of Compensation at “However, we would not be surprised to find in next year’s survey that bonus prevalence and payouts actually dropped in 2020, given the ongoing economic effects of COVID-19.”

Fusco notes that this survey closed June 21, 2020 and, in the highly changeable economic climate, these salary plans may be significantly altered by 2021 depending on the course of COVID-19.