More companies planning to use tax-cut savings for worker training than salary increases

Source: The Hill



BY NAOMI JAGODA - 10/02/18 03:57 PM EDT

Companies are more likely to say they're using their savings from President Trump's tax-cut law to boost capital investments and worker training than to boost salaries, according to a survey released Tuesday.

Consulting firm Korn Ferry surveyed executives at 152 companies with annual revenues totaling $700 billion. The survey found that 49 percent of companies said they are planning to increase capital investments at a faster rate, 34 percent are planning to increase workforce training and development, and 14 percent are planning additional increases in base salaries.

“While it is a positive sign that companies are planning to use the tax savings to invest in their people through training and development, the sentiment that compensation will increase as a result of the new legislation appears to not be panning out,” Tom McMullen, global leader of Korn Ferry’s Intellectual Capital for its Rewards Practice, said in a news release.

“Organizational leaders are seeking a better [return on investment] in balancing the allocation of savings into longer-term capital and people investments, such as training, as well as passing savings along to shareholders," he added. "In addition, a number of executives suggested that savings resulting from the U.S. tax cut are likely to be offset by new international trade tariffs.”

Read more: https://thehill.com/policy/finance/409527-more-companies-planning-to-use-tax-cut-savings-for-worker-training-than-salary