Benefits February 3, 2009

Majority of Employers Still Planning Pay Increases

February 3, 2009 (PLANSPONSOR.com) - A new WorldatWork survey finds employers are decreasing salary budgets, but the majority still plan to give employees a raise this year.
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Results from the WorldatWork Special Update: 2008-09 Salary Budget Survey found that across all employee categories, industries, and regions, employers plan to lower their 2009 salary budget increase projections by 0.8%, according to a press release. This brings average salary budget increases this year to 3.1% from 3.9% when data was first collected in April 2008.

Half of responding organizations (51%) made changes to their 2009 projected salary budget increases, with more than 90% of those making changes lowering their salary increase budgets by an average of 1.6%, the press release said. Seventy-seven percent of the workforce can still expect to receive base pay raises.

When it comes to increases for officers and executives, nearly 17% of respondents reported zero salary budget increases in December 2008 compared to 3% in April 2008.

Other key findings of the survey include:

  • Major metro areas with the largest projected salary budget increases (3.1%) are: Philadelphia, Pittsburgh, San Francisco, and Washington, D.C.
  • For exempt salaried employees, 10% of participating organizations will be freezing pay in 2009.
  • For organizations reducing salary budget increases, 19% to 33% are cutting salary increase budgets to zero.
  • More than half of the organizations minimizing their 2009 salary increase budgets cited a recent and/or anticipated decline in business as the reason for change.

Survey data was collected in December 2008 from 1,169 respondents.

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