Dive Brief:

• The results of a new Aon research study show pay increases will remain largely stagnant next year, per an email provided to HR Dive. According to Aon's U.S. Salary Increase Survey, workers saw a 2.9% raise in base pay in 2017. In 2018, workers are projected to see a 3% increase in base pay.
• The projections come as other reports reveal the strengthening of the economy and optimistic job numbers, showing the pressure companies are under to focus on results and efficiency. Workers who expect to receive sizable performance-based bonuses next year will be equally disappointed; employers plan to spend only 12.5% of payroll on bonuses — the lowest increase since 2010. Only high performers can expect to receive significant raises next year, Aon said. 
• Meanwhile, more than two-thirds of organizations plan to increase pay differentials in 2018. The research results show that 40% of employers are reducing or eliminating pay increases for less-than-stellar performers and 15% are setting performance targets that are more stringent, Aon found. 

Dive Insight:

Other studies, including a recent one by Willis Towers Watson, show similar projections that pay increases are holding steady into 2018 at about the same rate, 3% on average. Only managers and high performers can expect to see raises at higher percentages.

While the economy is churning out bigger job numbers, wages aren't increasing as fast. Some employers might have raised wages to meet the U.S. Labor Department's now-abandoned overtime rule threshold. Others might have anticipated that they'd have to make substantial wage increases and held off making large interim increases.

This year's college graduates expected significantly higher starting wages, but they may be disappointed by what employers are actually paying in starting salaries and next year's annual increases. To offset this stagnation, employers may want to emphasize their benefits or perquisites to attract new talent.