WorldatWork Newsline
U.S. Base Salary Increases Slightly Higher as Economy Stabilizes
June 30, 2010 — Planned salary increases for 2011 are at 3% and reflect a sustained uptick relative to the low point in March 2009, when salary increases were at a low point of 2% for most employee groups and 0% for executives, according to research released by Hay Group. After factoring in annualized consumer price index (CPI) growth for 2010 at 2%, the result is a "real" gain of 1%.
"The contradiction in the U.S. economy continues to cause U.S. businesses to exercise restraint in growing base salaries," according to WorldatWork member Tom McMullen, Hay Group's North American reward practice leader. "The performance-oriented, post-recession world in which organizations are operating has far-ranging implications for reward. HR executives are looking for ways to balance the cost of reward programs and limited pay increases with the need to attract, retain and engage key talent. Many organizations are emphasizing 'total' reward programs as a result — engaging employees in nonmonetary ways through more meaningful work experiences, clearer career paths, global mobility and targeted development opportunities."
The survey data shows that at the beginning of the decade, salary increases were tracking between 4.5% and 5%, and then were at a steady 4% from 2005 to 2008. The past three years have seen the lowest base salary increases that most employees have ever experienced, Hay reports. Further, planned increases for 2011 are slightly higher than this time last year and are consistent across executive, middle management, supervisory and clerical positions, and relatively consistent across most industry sectors.
"As organizations emerge from the recession, they are shifting more focus from fixed to variable pay," McMullen said. "This is partly cost-driven, as those organizations with higher proportions of variable pay tend to have more flexibility to cope with economic volatility. Variable pay also has proven to be an effective lever for motivating performance and aligning employees with the organization's goals and priorities."
Hay Group's forecast results are based on the latest data available from the firm's U.S. database, provided by more than 300 U.S. organizations from March through June 2010.
Contents © 2010 WorldatWork. No part of this article may be reproduced, excerpted or redistributed in any form without express written permission from WorldatWork.
Access Content Source: http://www.worldatwork.org/waw/adimComment?id=38939
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
No comments:
Post a Comment