With rumblings about the economy improving, you may feel pressure to beef up pay raises this year. New studies say, “Forget about it.”
Most companies plan to hold their compensation cards close to the vest in 2004 by increasing salaries only slightly. Compensation surveys by consulting firm William M. Mercer and the compensation association WorldatWork estimate that pay increases will average between 3.4 percent and 3.8 percent in 2004.
This would mark the third consecutive year that annual pay increases have fallen below 4 percent. For the eight years prior to 2002, annual pay increases averaged 4.1 percent to 4.4 percent, before dipping to 3.8 percent in 2002.
Employers planned on bigger raises in 2003, but they pulled back as the economy dragged longer than expected. Heading into 2003, U.S. companies projected raises at 3.9 to 4.3 percent. In reality, raises for 2003 hovered around 3.5 percent.
Despite lower salary increases, slow inflation continues to help employees. The Consumer Price Index rose only 2.2 percent in the past 12 months. So employees avoid the “double whammy” of declining pay hikes and rising inflation.
Because salaries vary by industry, it’s wise to track what your competitors are paying for each position. (You can bet your people are tracking it!) Check salary ranges on these Web sites:
National Compensation Survey, U.S. Bureau of Labor Statistics. It lets you slice and dice pay data by state, occupation and more. Find it at www.bls. gov/ncs. The Salary Wizard lets you create a salary report based on location and job. Go to www.salary.com. SalaryExpert.com offers a free tool that lets you search salary info by ZIP code and position. Go to www.salaryexpert.com. WageWeb has wage data on hundreds of benchmark positions. Go to www.wageweb.com.