A Look at Salary Increase Budgets in the Wake of the Economic Crisis

I'm getting a lot of calls and emails these days inquiring about what organizations - in general - are doing with their salary increase budgets given the continuing economic crisis.  Fortunately (if this is a fortunate side to any of this), a number of studies have been released in the past few days, giving us a glimpse at what is happening here in the U.S.

Bottom line: It's a bit of a mixed bag, but at this point it still looks as though most employers are planning to hold their salary budgets steady for 2009.

From studies conducted by Hewitt (411 organizations), Watson Wyatt (248 organizations), Mercer (190 organizations, based on yesterday's WSJ article), WorldatWork (members only, 698 members responding to a Quick Poll) and BLR (Business & Legal Reports) (518 organizations):

Percent of employers planning to decrease their 2009 salary increase budget -

• Hewitt study: 42%
• Watson Wyatt study: 28%
• Mercer study: 42%
• WorldatWork poll: 33%
• BLR study:  39%

Adjustments to planned 2009 salary increase budget -

• Hewitt study: Down an average of 1.0% to 3.1% for hourly and salaried exempt
• Watson Wyatt study: Down on average to 2.5% from 3.7%
• Mercer study: Down on average to 3.6% from 3.7%
• BLR study: Down on average to 2.8% from 3.7%

Plans for a salary freeze -

• Hewitt study: 15% considering a salary freeze
• Watson Wyatt study: 4% have already implemented a salary freeze, 12% will do so in the next 12 months
• BLR study: 25% considering a freeze on all raises

Postscript: The WorldatWork data on this post was updated on November 1  and for the final time (after the poll officially closed) on November 5, 2008.  BLR (Business & Legal Reports) data was also added on November 5, 2008.

Comments

[Totally Consumed]

so ... I suppose this would therefore be a bad time to ask my boss for a raise?

[Ann Bares]

Well that's one way to look at it. But ... perhaps it depends on what you can bring to the table that makes that raise worthwhile in times like these? Hopefully employers are taking a long view...