In the latest release of its survey "The Effects of the Economic Crisis on HR Programs" (which reflects the practices of 245 large U.S. companies) Watson Wyatt reports that merit budgets appear to be dropping further, even from the levels reflected in research updated in late December.
Just a few weeks ago, WorldatWork published an update to its annual salary budget study, reflecting the practices of 1,033 participating organizations, and reporting an average anticipated 2009 salary increase of 3.1%.
Now Watson Wyatt is estimating that salary budgets have been slashed further in just the past couple of months (the latest data was collected in earlier February), dropping to an average of 1.5% for 2009.
An excerpt from the Watson Wyatt report:
A few things to consider (says the optimist in me):
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The Watson Wyatt study covered a much smaller sample - less than one quarter the number of organizations included in the WorldatWork study.
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The Watson Wyatt study reports that its participants were "large companies". The WorldatWork study represents a broader range of organizational sizes. It's possible that large companies are being more aggressive in slashing merit budgets than smaller organizations.
Nonetheless, it isn't good news. And it affirms that 2009 salary increase budgets and plans are still in flux.
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