Some Employees May Receive A Pay Raise In 2011

July 14, 2010

Line GraphU.S. salary budgets remain low, but projections for 2011 show a slight increase, reports The Conference Board, a New York-based research group.

A news release defines "salary increase budgets" as the "pool of money that an organization dedicates to salary increases for the coming year". The budget is used to award individual employees for performance or merit increases, as well as pay adjustments such as promotional increases. The budget also includes pre-determined, scheduled "step" increases or salary increases.

CNN Money reports that the median salary increase budget stands at 2.5 percent for the second straight year. However, the figure is forecasted to increase modestly to three percent. "This less-than-robust increase is an indication that the economic recovery has not yet picked up enough strength to significantly raise salary budgets to a level consistent with a healthy economy," said Christopher Woock, a human capital researcher at The Conference Board and one of the authors of the 2011 report.

The data showed little variation across industries and no specific group was projected to exceed the overall three percent. However, the lowest median salary increase budget is expected to be in the transportation industry, with 2.25 percent for exempt employees and executives. The insurance industry is also expected to be below the three percent median.

In contrast, the diversified services industry and diversified financial industry are projected to have the highest gains.

The press release also states that companies will pay for performance rather than giving general company-wide pay raises.

According to The Conference Board, analysis was based on responses from 313 organizations that were surveyed between April 7 and April 30, 2010 and includes non-exempt hourly, non-exempt salaried, exempt and executive employees.

Woock said, "The news is not all grim." CNN Money reports that the weak economy should keep consumer prices in check, which could boost the purchasing power of these small increases. According to Woock, "There appears to be little risk of inflation eroding the real value of the increase."

Compiled by Heidi M. Agustin


"Pay raises are coming--but they won't be much," CNNMoney.com, July 13, 2010, Ben Rooney

"Salary Survey Projects Modest Increases for 2011," PRNewswire.com, July 13, 2010

"U.S. Salary Increase Budgets for 2011," conference-board.org, July 2010, Christopher Woock and Judit Torok

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