July 13, 2010 (PLANSPONSOR.com) - U.S. salary increase projections for 2011 show a modest increase, according to The Conference Board annual salary increase budgets survey report.
For the second straight year, the median salary increase budget in 2010 is 2.5%. Projections for 2011 show a modest increase to 3%. A press release explained that the lowest median salary increase budget forecast for 2011 is in the transportation industry - 2.25% for exempt employees and executives. The insurance industry is also below the 3% median overall forecast for non-exempt salaried, exempt, and executives, while the banking sector reported the lowest projected 2011 increase for non-exempt, hourly employees.
Across industries, the 2011 forecast for salary increase budgets showed little variation, with no employee group in any industry projected to exceed the overall median of 3%, according to the press release.
The largest year-over-year projected increases are in the diversified services industry - where the projected 2011 median salary increase budget is 0.5 to 3 percentage points higher than the actual 2010 budget - and in the diversified financial services industry - where the projected 2011 median salary increase budget is 0.5 or 0.63 percentage points higher than the actual 2010 budget.
The survey found pay for performance continues to be the common approach for the allocation of salary increase budgets, as companies remain focused on higher-performing employees and growth businesses. While most companies have not budgeted general increases, overall merit increase percentages for both 2010 actual and 2011 projected budgets mirror the trend of those of total increases. Information was gathered from 313 companies surveyed between April 7 and April 30, 2010.