Hawaii Employers Council 2016 Salary Adjustment Survey participants reported that the average 2016 actual increase in Hawaii is 2.7% percent for all employee groups, with the median reporting at 3.0% which matches the U.S. median.

 

Employee Groups

 

 

The average 2017 salary adjustment projection for all employee groups is 2.5%, with the median reporting at 3.0%, which matches the U.S. median.  This is the third year where salary adjustment median projections for Hawaii are aligned with the U.S.

 

The data indicates the use of lump sum payments in lieu of salary adjustments is not a prevalent practice with only 10.5% of participating organizations using this practice.

 

The most prevalent practice for the execution of salary adjustments continues to be "Common date for all employees".

 

Salary Structure Adjustments

 

The data indicates that 51.5% of all participating organizations have a formal pay structure.   When drilling down further, 90.5% of large companies (1,000+ employees) continue to be the significant group with formal pay structures.

 

An organization's salary structure is a hierarchy of pay ranges with established minimum and maximums.  Organizations apply control points (often the mid-point) within each salary range.  As a general rule, a percent increase is applied to the control points to adjust the salary structure.

 

For those organizations utilizing a formal salary structure, 1.9% is the average increase with a median increase of 2.0%.  The National WorldatWork Survey Report indicates a national average of 2.1% and a median of 2.0%.

 

Base Pay Target Levels

 

Participants were requested to share benchmark points where an organization would target base pay levels in comparison to the market.  Majority of organizations either target base pay at the 50th percentile (median) or have no formal compensation strategy for targeting base pay levels.

 

Effect of FLSA Changes

 

On May 18, 2016, the Department of Labor announced changes to the Fair Labor Standards Act (FLSA) updating the salary and compensation levels for the white collar overtime exemptions. One of the new rule changes sets the salary threshold for exempt salaried workers at $913 per week, or $47,476 annually (up from $455 per week or $23,660 annually).

 

The 2016 Salary Adjustment Survey inquired about any impact of the anticipated salary and compensation level changes on the organization's 2016 base salary budget.  94% of organizations reported no impact to the Non-exempt salaried workforce and 81% of organizations reported no impact to the Exempt salaried workforce.  Only 2% of organizations reported a lower increase for the Exempt salaried workforce.

 

The impact outcomes are slightly different for projected 2017 salary budget, where 86% of organizations reported no impact and 14% report a higher base salary budget for the Non-exempt salaried workforce.  70% of organizations report no impact with 27% of organization reporting a higher base salary budget for the Exempt salaried workforce.

 

Effect of Health-Care Costs

 

Although rising health-care costs continue to be of concern, the majority of participating organizations (70%) report that health-care costs will not impact base salary budget recommendations.

 

Employee Recruitment and Retention

 

Attracting and retaining key talent is top of mind for all organizations, and the top four tools utilized by organizations are: