Salary increase budgets hit 25-year low
September 21, 2009 by Christian SchappelPosted in: In this week's e-newsletter - benefits, Latest News & Views, Pay and benefits
Thinking of scaling back employee pay increases? You’re definitely not alone.
The 2010 median forecast salary increase budget (the percentage of current payroll a company dedicates to salary increases for the coming year) is 3%, down half a percent from 2009, according to new survey from The Conference Board.
That’s the lowest yearly forecast for company salary budgets in 25 years.
The insurance industry is reporting the highest 2010 forecast at 3.5%, while the communications industry has the lowest forecast at 2.5%.
While the overall forecast is low, employers, on average, are still budgeting for salary increases ahead of inflation (The Conference Board projects the inflation rate to be 2% in 2010).
Tags: communications, company salary budgets, inflation, insurance industry, salary increase budget, The Conference Board
September 24th, 2009 at 2:29 pm
Well, let’s have a reality check – Local Government is at 2% Jan/1% July split for 2009 and considering wage freeze for 2010.
So let’s hear from others out there – are you really giving 3% increases when the consumer price index is in the negative numbers ??
September 24th, 2009 at 3:42 pm
No, we’ve already cut back in 2009 – 2% (we too saw the negative number on the CPI). However, the union wages were negotiated over a year ago and provided a 3% increase to about 1/2 our workforce.
September 24th, 2009 at 3:51 pm
Our Agency did not budget any salary increases for 2009. Hopefully, 2010 will be a different story.
September 25th, 2009 at 2:22 pm
We had a wage freeze for 2009 and not sure yet what 2010 will bring.
September 28th, 2009 at 1:42 pm
We have had a wage freeze since July 2008 including no COLA as well. No salary increases were approved for the new fiscal year that began in July 2009 (FY 2010). It may look even dimmer when it is time to prepare the budget for fiscal year 2011.
October 8th, 2009 at 3:46 pm
Our 2010 increase will be 2%, as compared with the 5% last year.
The employees are upset, so I remind them that some people are getting nothing.
Any increase is better than nothing.
We also have a very minimul increase in our health insurance premiums for 2010. Not many companies can say that.
In this economy, I say the lucky people are the ones who still have jobs.
February 8th, 2010 at 12:41 pm
In 2009 had a salary budget of 3.25% which included merits, pay adjustments and promotions. This year our budget is 2.7%. Employees are not happy, but we try to emphasis the positive; we’ve had no lay offs, no salary freeze, we have great benefits (a small increase in premiums, still great coverage; and we still have 401K 4% company matching.
Employees don’t want to hear “be happy you have a job”. Remind them of the good job they are doing, show appreciation at every chance you get and be positive. Thank the employees for hanging in there in these tough times.