Salary Budgets for 2012 Declined Slightly Worldwide

By Culpepper and Associates Inc. Mar 30, 2012
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Salary budgets for 2012 are slightly lower than initially projected in mid-2011, results from the 2012 Culpepper Salary Budget Update Survey, released in March 2012 reveal.

Table 1, below, shows actual base salary increases provided in 2011 and projected base salary increases in 2012 for regions throughout the world. Data for the middle column showing 2012 Projected Base Salary Increases (mid-2011) was collected from June 11-Aug. 24, 2011. Data for the right-hand column showing 2012 Projected Base Salary Increases (early 2012) was collected Jan. 3-March 5, 2012.

For purposes of this survey, base salary increases included COLAs (cost-of-living adjustments), inflationary increases, merit increases, discretionary increases and other nonpromotional increases. Participants were asked to exclude promotional increases, one-time adjustments and mandated salary increases required by collective labor agreements and governments.

 

Salary budget data was collected from 870 participating organizations with employees across 98 countries and 24 international regions. The box at the end of this article lists the countries included in each region.

Few Companies Freezing Salaries

Figure 1, below, shows that the percentage of companies planning to freeze salaries across all jobs and locations in 2012 (4.0 percent) was less than 2011 (4.4 percent) but higher than initially projected (2.9 percent).

 

Base Salary Increases: 2008-2012

Base salary increases in the Eurozoneare projected at 2.92 percent in 2012, slightly lower than initially projected (2.94 percent) but higher than in 2011 (2.85 percent).

Base salary increases across South Asia are higher (10.67 percent) than other regions.

Figure 2, below, shows how base salary increases have changed from 2008 through 2012 for major global geographic regions. Since bottoming out in 2009, average base salary budgets across the globe climbed for two years. In 2012, base salary budgets are projected to decline slightly or remain the same across most regions.

 

North American Salary Trends

Base salary increases in the U.S.are projected at 2.91 percent in 2012, lower than initially projected (3.01 percent) but about the same as in 2011 (2.92 percent).

Base salary increases in Canada are projected at 2.70 percent in 2012, significantly lower than initially projected (2.94 percent) and slightly lower than in 2011 (2.76 percent).

Figure 3, below, shows how base salary increases have changed from 2008 through 2012 in the U.S. and Canada.

 

Additional Findings

Among other takeaways from the survey:

Technology outpaces most other sectors. As a group, base salary increases in technology companies are projected to outpace most other industry sectors in 2012.

Annual salary reviews most common. About nine out of 10 companies review base salaries annually.

Most companies aim to match or lead market pay rates.About two-thirds of companies have a base salary philosophy with an objective to match or lead the market and pay salaries at or above current market levels.

Regions:

Mexico and Central America: Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama.

Caribbean and West Indies: Dominican Republic, Puerto Rico, Trinidad & Tobago and other Caribbean islands and territories. Cuba was not included.

South America: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Uruguay and Venezuela.

European Union (EU): The 27 member states in the EU, including Eurozone (€) and non-Eurozone nations.

EU (Eurozone): Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain.

EU (Non-Eurozone): Bulgaria, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, and the United Kingdom.

Europe (Non-EU): Armenia, Azerbaijan, Belarus, Bosnia & Herzegovina, Croatia, Georgia, Iceland, Kazakhstan, Kyrgyzstan, Liechtenstein, Macedonia, Moldova, Norway, Russia, Serbia, Switzerland, Tajikistan, Turkey, Turkmenistan, Ukraine and Uzbekistan.

European Free Trade Association (EFTA): Iceland, Liechtenstein, Norway and Switzerland.

Commonwealth of Independent States: The former Soviet Republics of Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

Middle East: Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, United Arab Emirates and Yemen. Iran and Syria were not included in the survey.

North Africa: Algeria, Egypt, Morocco and Tunisia. Libya, Sudan and Western Sahara were not included in the survey.

Sub-Saharan Africa: Angola, Cameroon, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Senegal, South Africa, Tanzania and Zimbabwe.

South Asia: Bangladesh, India, Pakistan and Sri Lanka.

East Asia: China, Hong Kong, Japan, Macau, South Korea and Taiwan. North Korea was not included in the survey.

Southeast Asia: Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

Pacific: Australia, New Zealand and other Oceania Islands & Territories.

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

Source: Culpepper Salary Budget Survey, March 2012, www.culpepper.com.
© 2012, Culpepper and Associates Inc. Reposted with permission.

Related Article:

Asian Firms Offer More Variable Pay than Western Firms, SHRM Online Compensation Discipline, March 2012

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