Salary Budgets Projected to Continue Steady Growth Despite Troubled Economy

eWorldatWork released preliminary results from its 35th annual salary budget survey (which includes over 2,700 participating organizations) today, showing pay budgets growing steadily from 2008 to 2009 in the U.S. and Canada.  The 2008 actual average increase in salary budgets was 3.9%, and the survey projects a 3.9% increase again in 2009.  WorldatWork views this even level of growth as an indicator of labor market stability despite current economic challenges.  This makes sense to me, and it is good news.

A few other highlights from the preliminary results:

• There is also stability in the proportion of employees receiving salary increases.  For the third consecutive year, participating organizations are reporting that, on average, 91% of employees can expect to receive an increase in their base pay this year.
• High performers can expect raises of over 5% while below average performers can expect 2% or less, an indicator that employers continue to work on pay differentiation based on performance.

Full results of the survey will be released in early August.

Comments

[Totally Consumed]

I wonder if the WorldatWork numbers are adjusted for inflation.

With recently released CPI numbers showing a 12-month inflation rate of over 5%, I'm curious how inflation factored into the WorlatWork results.

[Ann Bares]

TC:

I believe the World@Work directly reports the salary increase numbers that the survey participants submit, with no adjustment for inflation. In fact, World@Work's detailed survey report typically shows a historical comparison of salary increase, structure adjustment and inflation (CPI) numbers to illustrate the relationship between them - which, of course, is different in different years. There are some years where salaries are increasing at a faster rate than the CPI and some years (like this one) where the CPI is outpacing salary growth.

So I think the response to your question is that these are separate and discrete (but obviously related) numbers.

I'll also check to see if I can get someone from WorldatWork to weigh in on this, so we can get the answer directly from the source.

Thanks for the comment and question!

[Alison Avalos]

Ann:

Thank you for the invitation to respond.

You are correct; the data in the WorldatWork Salary Budget Survey is not adjusted for inflation. We do report the change in CPI in contrast to salary budget increases over time. As of April 2008 when data was collected, the rise in the CPI for the previous 12 months was 3.9%, matching the national total salary budget increase average for 2008.

Alison Avalos, CCP, CBP, GRP
Practice Leader and Research Manager for WorldatWork

[Ann Bares]

Alison:

Thanks so much for your quick response to our questions!