U.S. salary budgets continue increasing: Survey

Only 3 per cent of firms planning wage freeze
|hrreporter.com|Last Updated: 07/08/2011

Salary increases are slowly trending upward toward pre-recession levels, according to the 38th Annual WorldatWork Salary Budget Survey.

Organizations are awarding at least some base salary increase to 88 per cent of all employees in 2011, on average, compared to 86 per cent of all employees in 2010, 80 per cent in 2009 (all-time low) and 91 per cent from 2006 to 2008, found the survey.

Depending on performance ratings, this year's low performers can expect an average pay increase of 0.7 per cent, middle performers 2.7 per cent and high performers four per cent.

Only three per cent of employers are planning across-the-board salary freezes compared to 43 per cent in 2009 and 10 per cent in 2010. The actual increase in salary budgets was 2.8 per cent in 2011 and is projected to rise again by 2.9 per cent in 2012, according to the survey.

“The situation where significant numbers of employees are not receiving any pay increases appears to be over for now,” said Kerry Chou, compensation practice leader at WorldatWork. “However, a quick return to pre-2008 budget levels seems unlikely given the modest rate at which budgets are recovering.”

“Unemployment rates may be playing a significant role in keeping salary budget planning at moderate levels,” said Alison Avalos, research manager at WorldatWork. “The law of supply and demand is also at play: Employers don’t need to plan for high pay increases because there are more employees than there are jobs.”

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