Salary Increases at Historically Low Levels

The 2004 numbers remained consistent with the previous year’s salary increases, the consulting firm stated in a press release. More specifically, increases averaged 3.4% for salaried exempt employees, 3.3% for salaried nonexempt employees, 3.3% for nonunion hourly workers and 3.7% for executives. Three percent of businesses implemented a salary freeze in 2004. However, only 1% expects to do the same next year.

class=”NormalDS”> Projected increases for 2005 are slightly better, with estimates of 3.6% for salaried exempt employees, 3.5% for salaried nonexempt employees, 3.5% for nonunion hourly workers and 3.8% for executives. However, when compared to increases from 2001, the numbers look somewhat less impressive. In that year, workers saw, on average, increases of 4.3% for salaried exempt employees, 4.2% for salaried nonexempt employees, 4% for nonunion hourly workers and 4.5% for executives.

class=”NormalDS”> “We may never see base salary increases in the mid-to-upper 4% range again,” said Ken Abosch, a business leader for Hewitt Associates, in the news release “Cost containment is still a focus in 2004, which led to a status quo in base salary increases. And, while we expect salaries to rebound a bit in 2005, most organizations continue to place greater emphasis on performance-based programs, such as variable pay. These programs should continue to grow in popularity and potential payout for years to come.”