WorldatWork Survey: U.S. Employers Hold the Line on Planned Salary Increases

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The WorldatWork Salary Budget Survey, the largest of its kind, finds that U.S. companies are planning an overall salary budget increase of 3.9 percent across all employee categories, regions and industries. The report indicates that U.S. companies are planning to hold the line next year: the 2008 salary budget increase is expected to remain at 3.9 percent.

Modest 2007 salary budget increases of 3.9 percent, which are expected to plateau in 2008, present a challenge for managers

The WorldatWork Salary Budget Survey, the largest of its kind, finds that U.S. companies are planning an overall salary budget increase of 3.9 percent across all employee categories, regions and industries. The report indicates that U.S. companies are planning to hold the line next year: the 2008 salary budget increase is expected to remain at 3.9 percent.

Salary budget increases have risen one-tenth of a percent each year since 2004, according to the 34th annual WorldatWork Salary Budget Survey. WorldatWork, an international association of human resource professionals and business leaders focused on attracting, motivating and retaining employees, conducts the largest and most comprehensive salary budget survey in the industry.

Salary budgets – the total amount of money allocated by an organization for all employee salaries – do not include other employment hard costs, i.e. medical/dental insurance, payroll taxes, 401(k) match, etc. Base pay increases may come from merit increases, cost of living increases and general increases (promotional increases are excluded).

"Modest 2007 salary budget increases of 3.9 percent, which are expected to plateau in 2008, present a challenge for managers," said Anne C. Ruddy, CCP, president of WorldatWork. "They will have to think more holistically and learn the art and science of ‘total rewards’ to attract, motivate and retain talent."

WorldatWork Salary Budget Survey data includes results for the United States and Canada, major metropolitan areas in the two countries, major industries as well as data by organization size.
Washington, D.C. employers (see chart) report the highest total salary budget increase (4.1 percent) of all the surveyed metro areas. The biggest increase from 2006 to 2007 (3.7 percent to 4.0 percent) occurred in Houston.

Salary Budget Increases by Major Metropolitan Area (U.S.)
Actual 2006    Actual 2007    Projected 2008
NATIONAL    3.8%    3.9%     3.9%

Metro areas:    
Actual 2006    Actual 2007    Projected 2008
Atlanta    3.6%    3.8%    3.9%
Baltimore    3.7%    3.8%    3.9%
Boston    3.7%    3.9%    4.0%
Chicago    3.7%    3.9%    3.9%
Cincinnati    3.6%    3.7%    3.9%
Cleveland    3.6%    3.7%    3.8%
Dallas    3.8%    3.9%    3.9%
Denver    3.8%    3.8%    3.9%
Detroit    3.6%    3.7%    3.8%
Houston    3.7%    4.0%    3.9%
Los Angeles    3.8%    3.9%    3.9%
Miami    3.7%    3.8%    3.9%
Minneapolis    3.6%    3.8%    3.8%
New York    3.8%    3.9%    3.9%
Philadelphia    3.7%    3.8%    3.9%
Phoenix    3.7%    3.8%    3.9%
Pittsburgh    3.6%    3.8%    3.9%
Portland    3.6%    3.8%    3.9%
San Diego    3.8%    3.8%    3.9%
San Francisco    3.8%    3.9%    4.0%
San Jose    3.7%    3.8%    3.9%
Seattle    3.7%    3.9%    3.9%
St. Louis    3.7%    3.8%    3.8%
Tampa    3.8%    3.7%    3.9%
Washington, D.C.    4.0%    4.1%    4.1%

Other key findings from the WorldatWork Salary Budget Survey include:

  •     As in 2005 and 2006, the largest salary budget increases this year are targeted for officers/executives, outpacing workers in the three other employee categories, i.e. nonexempt hourly nonunion, nonexempt salaried, exempt salaried. In 2007, officers and executives experienced salary budget growth above 4 percent for the first time in six years.
  •     Companies with fewer than 500 employees reported the highest actual salary budget increase in 2007 at 4.1 percent. The biggest companies (more than 20,000 employees) reported an increase of 3.7 percent.
  •     Among major industries surveyed, public administration had the largest actual salary budget increase (4.3 percent) this year. The smallest increases (3.7 percent) were found in the transportation/utility and retail sectors.
  •     The percentage of organizations using variable pay increased slightly from 79 percent in 2006 to 80 percent in 2007, continuing a steady upward trend in the use of compensation that is contingent on performance or results achieved.

Media interested in a complimentary e-copy of the report may contact Marcia Rhodes at mrhodes@worldatwork.org or 480/348-7285. All others, please contact Customer Services at 877/951-9191. The cost is US$210 per copy.

Survey respondents are WorldatWork members employed in the HR, compensation and benefits departments of mostly large North American companies. Combined, the survey’s 2,500 participating organizations represent more than 15 million North American employees.

Note to editors: A Salary Budget Survey is different from a Salary Survey in that a salary survey compares salary data for specific positions by title and location. On the other hand, salary budget survey results are a benchmark used by employers and HR practitioners to understand what the competitive labor market is planning to spend on salary increases.

About WorldatWork®
The Total Rewards Association
WorldatWork (http://www.worldatwork.org) is an international association of human resource professionals and business leaders focused on attracting, motivating and retaining employees. Founded in 1955, WorldatWork provides practitioners with knowledge leadership to effectively design and implement strategies and practices in total rewards – compensation, benefits, work-life, performance and recognition, development and career opportunities. WorldatWork supports its 30,000 members and customers in 75 countries with thought leadership, education, publications, research and certification.

The WorldatWork group of registered marks includes: WorldatWork®, workspan®, Certified Compensation Professional or CCP®, Certified Benefits Professional® or CBP, Global Remuneration Professional or GRP®, Work-Life Certified Professional or WLCPTM, WorldatWork Society of Certified Professionals®, and Alliance for Work-Life Progress® or AWLP®.

WorldatWork Journal, WorldatWork Press and Telework Advisory Group are part of the WorldatWork family.

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

Contact:
Marcia Rhodes, APR
Media Relations
WorldatWork
Phone: 480/348-7285

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