Employers Report Modest Increase in Pay Raise Budgets

August 27, 2008 (PLANSPONSOR.com) - For 2009, the median budget for salary increases is projected to be 3.75% for both non-exempt salaried and hourly employees, The Conference Board reports.

According to a press release, the median salary increase budget projections for exempt and executive employees are higher at 3.8% and 3.9%, respectively.

By comparison, salary increase budgets average 3.8% in 2008 across non-exempt, exempt, and executive employee categories, while salary increase budgets for non-exempt hourly employees come in lower at 3.7%. Among the 250 companies that responded both last year and this year, some 35% report lower actual 2008 salary increase budgets than they projected last year for executives and exempt employees.

“Companies are responding to a sluggish economy by remaining disciplined on labor cost increases,” said Charles Peck, Compensation Specialist with The Conference Board, in the press release.

Across industry categories, Diversified Financial Services reported the highest increases in 2008 for all employee categories, while Trade reported the lowest. The highest projected increase for 2009 was reported by Consulting Services, while Trade was again the lowest.