It’s that time of year again when we take a look back on 2012 and begin looking forward to 2013. When evaluating the past year, I see good news and bad news.
Raises in salary have been marginal
The bad news is that salary increases in 2012 were minimal. While we are definitely in better shape than in the years directly following the recession in 2008, companies have been focusing on cutting costs as uncertainty about growth prospects continues and, as a result, raises have been incremental.
Base pay increased by about 2.8% in 2012, a marginal increase from 2.7% in 2011. This varies significantly by city and industry, with Denver; Dallas; Detroit; and San Diego seeing higher than average increases in the 3% range, and San Francisco; Chicago; and Minneapolis experiencing below average increases around 2.7%.
If candidates want to see a good bump in pay, they will need to change jobs. Mid-level to senior people can expect an 8-12% increase in salary with junior candidates sometimes seeing slightly higher increases.
No urgency to hire
Overall, there’s a lack of urgency to hire. Junior candidates are seeing a fair amount of activity this year, but the trend has certainly been steady as you go. Clients are hesitating seeking the ‘perfect match’ and delaying hires at the more senior end (those making over $150k base). This is especially evident in certain industries, such as consumer packaged goods. CPG firms continue to focus on costs and are not hiring, in some cases laying off and replacing seasoned workers with younger and less expensive staffers.
Bonuses are also a factor in hiring, especially in the late fourth and early first quarters. Senior level candidates are choosing to sit tight until they get their anticipated first quarter bonus and hiring companies are reluctant to cover a lost bonus with a sizable sign-on. Instead, they are waiting to hire, or in some cases moving on to other, less expensive, prospects.
Now for some good news
The quantitative job market has been strong, even throughout the lackluster recovery. Consulting companies, for one, continue to be on the rise and are dominating analytics. Corporations are more and more turning to the flexibility of using consulting companies to address their quantitative issues and these firms are hot to hire if you are open to the heavy travel. I have also seen more tech companies developing their in-house quant capabilities and hiring more aggressively than other industries.
Housing market improving
One major change in just the past few months is that the housing market is looking more favorable. This means that there is less hesitation on both the client and candidate’s end to relocate for the right situation. Corporate relocation packages are coming back, whereas the pattern up until recently has been using sign-on bonuses to cover moving expenses.
A note on bonuses
Bonuses may not be back to pre-recession levels, but things are getting better and pay outs have been consistent. One of the most interesting trends that I’ve seen developing is companies paying out partial bonuses in 2012 in order to accelerate income in anticipation of next year’s higher tax rates. I have seen this come up a few times in active candidates since the presidential election and am curious what impact this will have on hiring in the next few months.
2013 – Here we come!
Every year has its ups and downs but I continue to see improvement in the job market and the quantitative arena as a whole. I’m ready for 2013, which incidentally is the International Year of Statistics. Let’s see if it lives up to the title!
It’s been a great year at Burtch Works and hopefully for all of you as well. Have a great holiday season and best wishes from everyone here to you and yours. See you next year!