More U.S. Employees to Get Raises as Pay Freeze Thaws

By SHRM Online staff Jul 7, 2011

Salary increases are slowly trending upward toward pre-recession levels, according to initial results from the 38th Annual WorldatWork Salary Budget Survey, released in July 2011.

WorldatWork, an association of total rewards professionals, fielded the survey among its members in April 2011. Respondents were employed in HR/compensation and benefits departments at mostly large U.S. companies.

Among the key findings for 2011:

• Salary budgets increased by 2.8 percent in 2011.

• Base salary increases were awarded to 88 percent of employees in 2011 vs. 86 percent in 2010, 80 percent in 2009 (all-time low) and 91 percent from 2006 to 2008.

• Across-the-board salary freezes were planned by only 3 percent of employers vs. 43 percent in 2009 and 10 percent in 2010.

And looking for to 2012:

• Salary budgets are projected to rise by 2.9 percent in 2012.

• Based on individual performance ratings at year-end 2011, low performers can expect an average pay increase of 0.7 percent, middle performers 2.7 percent and high performers 4.0 percent.

“The situation where significant numbers of employees are not receiving any pay increases appears to be over for now,” said Kerry Chou, compensation practice leader at WorldatWork. “However a quick return to pre-2008 budget levels seems unlikely given the modest rate at which budgets are recovering.”

“Unemployment rates may be playing a significant role in keeping salary budget planning at moderate levels,” added Alison Avalos, research manager at WorldatWork. “The law of supply and demand is also at play: Employers don’t need to plan for high pay increases because there are more employees than there are jobs.”​

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