Salary Trends 2010-2011

Thursday, September 23, 2010

In January 2008, a Towers Perrin’s (now Towers Watson) 2008 Global Compensation Planning Report of 4,000 plus companies in 60 countries, Towers projected an average salary increase of 3.9% for all employee levels for 2008.  A January 2009, a Towers Perrin’s (now Towers Watson) U.S. Companies Make Deeper Cuts in Pay Programs as the Economic Crisis Continues of 1,150 companies, Towers projected an average salary increase of 3.0% for all employee levels for 2009.  An August 2010, report by Towers Watson, U.S. Employers Planning Larger Pay Raises for 2011, of 1,046 companies, projected an average salary increase of 2.3% for all employee levels for 2010.

A survey of 2008 salary increases for health care was reported in 2008 Healthcare Salary Outlook, and commented on by John Rossheim, a Monster Senior Contributing Writer, reported a salary increase range of 3.5 to 4.0%.  The survey of 2009 salary increases for health care was reported in 2009 Healthcare Salary Projections, and commented on by Georgia Price of AllHealthcare, a Monster Community, reported a salary increase range of 3.5 to 4.0%, unchanged from 2008.  The 2010 Hay Group Healthcare Survey sponsored by TIAA-CREF, released on July 12, 2010, reported a continuation in the slowing of increased for health care workers. The survey projects a 2.5% increase in base pay in 2010.

In a 2008 survey of some 7,000 readers, posted on November 10, 2008, Computerworld, reported that most readers’ salaries had been negatively impacted by the economic downturn.  The 2009 survey of some 5,000 readers by Computerworld, reported that salaries were frozen, benefits were being reduced, and workloads were increasing. 

WorldatWork a not-for-profit professional organization reported in its May 2008, 2008-2009 Salary Budget Survey of 2,479 employer submissions that 2008 actual salary increase ranged from 3.8 to 4.0 percent.  The WorldatWork May 2009, 2009-2010 Salary Budget Survey of 2,644 employer submissions that 2009 actual salary increase ranged from 2.0 to 2.3 percent.

In a 9/16/2010 report posted by Culpepper and Associates on the website for the Society for Human Resource Management titled, “Global Salary Increase Budgets for 2010 and 2011”, 2011 US base salary increases are expected to be in the range of 2.38% to 2.91%

Although salary increases are improving as the economy strengthens, 2% to 3% is still a small merit budget. Even using traditional merit techniques and limiting increases to those at or above “meets” and only those below the mid-point, most organizations will only be able to squeeze a few extra percentage points out of the budget. With such low merit budgets available and few internal promotional opportunities available to them, some employees may be awaiting a job offer to jump ship. Organizations might be well advised to look for non-financial means to retain the talent left after several rounds of staff cuts.

While training budgets did not fare any better than salary budgets during the downturn, providing training now may position the organization’s top talent to take advantage of better times. Following multiple rounds of staff reductions, the remaining staff may be performing significantly higher-level duties or duties not normally found in their nominal job classification. Organization may want to re-evaluate those positions to determine if an upgrade in warranted. Attention should be paid to the FLSA exempt vs. non-exempt classification of any re-evaluated positions. An organization may be tempted to misclassify a position only to be faced with unpaid overtime claims in the future.