That’s down from the 4.4% average budget increase in 2001, but up slightly from 2002’s 3.8% budget hike.
While the overall pay budget for next year is projected at 3.9%, the consulting/legal/accounting and computer software/services industries are projecting higher budgets, 4.5% and 4.2% respectively, according to Mercer Human Resources Consulting’s new 2002/2003 US Compensation Planning Survey.
On the other hand, education, agricultural and chemical industries are planning for 3.4%, 3.5% and 3.5% budget increases, respectively.
Hesitant to Commit
Employers seem reluctant to commit to higher pay increase budgets, due in part to the sluggish economy the country has seen in the previous two years. In addition to lower overall pay budgets, employers are implementing other cost cutting measures such as workforce reductions, reduced work schedules, voluntary leaves of absence and extending time between pay increases from 12 months to 18 months.
One in six employers or 17% froze salaries for some or all employees in 2002 while only 6% of companies plan similar moves for 2003, the Mercer study found.
The survey was conducted by Mercer Human Resources Consulting, which relied on information from more than 1,600 organizations providing data from pay practices that affect over 15.5 million workers. More information can be found on their website www.imercer.com .