Salary survey shows raises under four per cent for third year in a row
Salaries increases in the United States will average 3.5 per cent for 2005 and will remain at this level next year as well, the Conference Board reports.
For the third consecutive year, salary increases are below four per cent as employers continue to show caution regarding salary increases.
“The recovery from the economic downturn appears to be leveling off, and U.S. companies are paying close attention to cost control,” says Charles Peck, compensation specialist, the Conference Board. “This continued caution is reflected in the pattern of salary increase budgets this year compared with last year’s projections.” For all industries as a group, 2005 salary budgets are averaging 3.5 per cent, virtually identical to last year’s projections. This is true for all three employee groups: nonexempt, exempt and executive.
For all but one of the individual industry groups, actual 2005 budgets were practically the same as what was projected. The lone exception: the insurance industry, where salary budgets of 3.5 per cent were below the 3.7 to 3.9 per cent forecast.
This year is the third time in 11 years that median increases have fallen significantly below four per cent.
“Inflation is the wild card in this game,” says Peck. The Conference Board currently projects a 3.1 per cent rise in inflation for 2005, which is below the average 2005 budget of 3.5 per cent. However, the four per cent inflation rise projected for 2006 would effectively wipe out the 3.5 per cent forecasted pay gain.
For the third consecutive year, salary increases are below four per cent as employers continue to show caution regarding salary increases.
“The recovery from the economic downturn appears to be leveling off, and U.S. companies are paying close attention to cost control,” says Charles Peck, compensation specialist, the Conference Board. “This continued caution is reflected in the pattern of salary increase budgets this year compared with last year’s projections.” For all industries as a group, 2005 salary budgets are averaging 3.5 per cent, virtually identical to last year’s projections. This is true for all three employee groups: nonexempt, exempt and executive.
For all but one of the individual industry groups, actual 2005 budgets were practically the same as what was projected. The lone exception: the insurance industry, where salary budgets of 3.5 per cent were below the 3.7 to 3.9 per cent forecast.
This year is the third time in 11 years that median increases have fallen significantly below four per cent.
“Inflation is the wild card in this game,” says Peck. The Conference Board currently projects a 3.1 per cent rise in inflation for 2005, which is below the average 2005 budget of 3.5 per cent. However, the four per cent inflation rise projected for 2006 would effectively wipe out the 3.5 per cent forecasted pay gain.
