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Salary Increase Budgets Improve in 2011
U.S. base salary increases projected to rise from 2.38% in 2010 to 2.86% in 2011

By Culpepper and Associates  3/22/2011

As the global economy and job market continue to show signs of improvement in 2011, most companies have increased their cash compensation budgets. Results from the 2011 Culpepper Salary Increase Budget Update Survey reveal that salary budgets, including salary increases, salary range increases, promotional increases and variable incentives are all higher in 2011 vs. 2010. In addition, the number of companies freezing salaries significantly declined, and salary cuts have nearly disappeared.

Data for the 2011 survey was collected from 809 participating organizations with employees across 85 countries and 24 geographic regions.

Key Findings and Trends

Salary increases rise. Average global base salary increases across all jobs and locations are projected to rise from 2.59 percent in 2010 to 3.18 percent in 2011. Most companies are budgeting salary increases of 3 percent for 2011.

U.S. salary increases. Base salary increases in the United States are projected to rise from 2.38 percent in 2010 to 2.86 percent in 2011.

Canada salary increases. Base salary increases in Canada are projected to rise from 2.26 percent in 2010 to 2.83 percent in 2011.

Salary freezes thaw. The number of companies freezing salaries across all jobs and locations is projected to decline sharply from 14 percent in 2010 to 5 percent in 2011.

Paying for performance. Most companies are budgeting salary increases of 5 percent for high performing employees, 3 percent for average performing employees and 0 percent for low performing employees.

Small companies provide higher increases than large companies. Base salary increases for start-ups and small companies are typically higher than for large companies.

Promotional salary increases jump. Salary increase budgets for employees promoted to a higher job level or position of responsibility are projected to jump from 7.61 percent in 2010 to 9.93 percent in 2011.

Global regions with the highest salary increases. Base salary increases in South Asia, South America, Africa and the former Soviet Republics (i.e., Commonwealth of Independent States) are higher and more volatile than other regions of the world.

Global regions with the lowest salary increases. Base salary increases in North America (i.e., United States and Canada), the Eurozone (€) and member states of the European Free Trade Association (EFTA) are lower and less volatile than other regions of the world.

Recent Trends

Salary budgets for 2011 have improved significantly compared to 2009. However, average projected base salary increases for 2011 are still much lower than 2008 (Figures 1 and 2).

 

Global Overview of Base Salary Increases

Table 1 provides aggregated average base salary increases for 2010 and 2011 for major geographic regions throughout the world. 

 

Table 2 provides aggregated average global base salary increases for 2010 and 2011 with breakouts by number of employees, industry sector and ownership.

Base salary increases in the technology and energy sectors are projected to outpace other sectors in 2011. On average, 2011 budgeted base salary increases for small companies are significantly higher than large companies.

 

Data source: 2011 Culpepper Salary Budget Update Survey of 809 organizations.

Survey dates: Jan. 4 through March 4, 2011.

The salary increase data in this report includes COLA (cost of living adjustment), inflation, merit and other nonpromotional increases.

Culpepper and Associates conducts worldwide salary surveys and provides benchmark data for compensation and employee benefits programs.

Reposted with permission.

Source: Culpepper Salary Budget Survey, March 2011, www.culpepper.com.

Related Articles:  

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SHRM Leading Indicators of National Employment (LINE) Report, SHRM Research, March 2011

Starting Salaries for 2011 Grads Up 3.5%,  SHRM Online Benefits Discipline, February 2011

Largest Merit Increases Since Financial Crisis on Tap, SHRM Online Benefits Discipline, February 2011

Stronger U.S. Wage Growth Foreseen, SHRM Online Compensation Discipline, February 2011

2011 Base Salary Increases See Modest Rise, SHRM Online Compensation Discipline, January 2011

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