Interior design salaries have grown only minimally in recent years. Now, with the national unemployment rate hovering around 4 percent, rising inflation, the much-publicized lower taxes for corporations and the pool of available interior design talent getting smaller, employers should anticipate that they will need to increase compensation to retain and attract good designers and other staff.

At the same time, in the face of greater competition and higher prices for products and materials, firms are under pressure to hold down costs and fees. To prevent losing valued staff or jeopardizing morale, employers should engage with employees to discuss their concerns and expectations regarding compensation and to explore options that are agreeable to both parties.

Data from the U.S. Bureau of Labor Statistics shows the mean annual wage for all interior designers rose by just 1.3 percent between 2015 and 2016. For designers working in interior design firms or in architectural firms, the increase was well below 1 percent. Current base salaries for designers, as reported by, indicate that there has been little improvement over the past year.

These numbers are in line with those of many other professional jobs. Nonetheless, after nearly 10 years of relative stagnation, wages overall are beginning to creep up. Hourly earnings finished the year an average of 2.5 percent higher and by some projections may rise by as much as 4 percent by the fourth quarter of this year. In anticipation that a rising tide will lift all boats, designers naturally will be expecting a more than nominal upward adjustment in their compensation.

To help ensure that those expectations are realistic, employers need to communicate openly with their staff about what they can and cannot offer, and the sooner the better.

Most interior design firms fall under the federal government's standards as a small business. As such, they will not qualify for many of the benefits enjoyed by larger companies under the new tax reform legislation. Employees need to understand this so as not to assume that principals are withholding a windfall from them.

In situations where market conditions are restraining a firm's ability to raise its fees, employers should explore other options than salary increases for incentivizing staff financially. These might include bonuses, profit sharing opportunities, contributions to a retirement plan or helping to pay down student debt. The viability and affordability of these options will depend on the firm and the needs of individual employees.

If you are planning on adding staff during the year, most assuredly you will need to be prepared to offer a competitive compensation package to attract the best candidates.

Doing so without also adjusting compensation for current staff, however, can stifle employee morale and productivity, and possibly lead to valuable employees seeking better employment opportunities elsewhere. Before you begin hiring, you should conduct a firmwide salary and compensation review, if you have not done so recently, to ensure that compensation for new hires is fair and equitable.

Compensation is not the only factor that motivates employees or accounts for their sense of job satisfaction. Still, with all the media attention on wages and impending wage growth, employers need to be prepared to manage employees' expectations and respond to their questions and concerns.

Being proactive is the best way to prevent the topic from becoming a distraction.