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Pay budgets, while on the low end of the global scale, haven't declined
Projected salary increases for 2013 are lowest in the United States, Spain and Japan and highest in India, China and Brazil, according to the 39th annual WorldatWork 2012-2013 Salary Budget Survey.
Salary Budget Increases
In addition, survey respondents from Singapore, Australia, Canada, Germany, the United Kingdom, France and the Netherlands reported planned 2013 pay increases ranging from 3 percent to 4.3 percent.
Japan, at 2.6 percent, had the survey’s lowest average 2012 actual total salary budget increase of the countries surveyed, and its 2013 projections are just a tenth of a percentage point higher (at 2.7 percent).
“Salary increases in growth markets such as India, China and Brazil remain strong again this year,” although projections for 2013 are somewhat lower than actual 2012 increases, said Adam Sorensen, GRP, global practice leader for WorldatWork. “Although more companies are implementing integrated total rewards programs to attract and retain employees, cash remains king among employees. The war for talent—particularly for senior leaders and employees with specialized skills—rages on. Organizations must continue to be competitive in cash compensation even as they expand the range of other rewards in order to attract, motivate and retain their critical talent.”
“Salary budget increases in the United States and Canada, while on the low end of the global scale, have not declined despite continued mixed economic signals,” added Kerry Chou, CCP, a compensation practice leader at WorldatWork. “However, it is apparent that employers still view the near term with uncertainty, and as such are not making significant changes to their salary budgets.”
U.S. Total Salary Budget Increases, by Employee Category
Nonmanagement (hourly nonunion)
"The salary budget increase normally exceeds the salary structure increase because an organization’s salary budget increase reflects not just the typical annual increase in wages, but also the acquisition of skills, competencies and experiences as well as employee performance, while the salary structure only reflects the annual wage increase," according to Ken Cardinal, CCP, CBP, a managing director with pay consultancy Pearl Meyer & Partners, in a WorldatWork commentary, Salary Structure Change and Compensation Increase Budgets.
WorldatWork, an association of total rewards professionals, fielded the survey in April 2012, receiving 4,299 responses from 13 countries representing more than 17 million employees. Survey respondents were WorldatWork members employed in the HR, compensation and benefits departments of mostly large companies.
Conference Board: U.S. Salary Increase Budgets to Rise 3% for 2013
Based on a sample of 316 companies, the Conference Board's U.S. Salary Increase Budgets for 2013 survey also reveals a median increase of 3 percent in 2012, just like in 2011. Projections for 2013 are 3 percent as well—an indication that the economic recovery has not yet picked up enough strength to substantially raise salary budgets.
Despite the relatively low level of projected salary budget increases in 2013, the danger of inflation eroding the real value of the increase appears slight, according to the Conference Board.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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