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August 02, 2006
Survey: 92 Percent of Employees Will Receive Pay Raises this Year

A new survey from WorldatWork reports that 92 percent of employees can expect to receive an increase in base pay this year.

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According to their 33 rd annual Salary Budget Survey, conducted among approximately 2,800 HR professionals from organizations representing approximately 15 million workers, employers were planning 3.8 percent actual average increases in their salary budgets for 2006 for all employee categories, and projecting 3.9 percent increases for 2007. The 2006 increase is slightly above the Consumer Price Index (CPI) of 3.5 percent.

"HR directors use salary budgets the way realtors use comps to make pricing decisions," said WorldatWork's compensation practice leader, Don Linder. "They rely on this benchmark data to establish, communicate and sometimes defend pay decisions." This is the second consecutive year that organizations reported that 92 percent of their employees could expect raises.

Other survey findings of note:

  • In terms of size, companies with fewer than 499 employees had the highest 2006 salary budget increases at 4.2 percent. Washington , DC reported the highest increases among all metropolitan areas at 4.0 percent. Organizations in the Public Administration sector had the highest increases among all industries, at 4.0 percent.
  • Also, the survey revealed that many organizations are stepping up efforts to attract and retain talent in a number of ways, including offering sign-on/hiring bonuses (offered by 69 percent of employees), spot bonuses (45 percent), retention bonuses (35 percent), and part-time employment with benefits (28 percent). In addition, more organizations are now turning to variable pay/performance-based pay programs, according to the survey. Last year, 66 percent of respondents reported using variable pay--this figure rose to 79 percent this year.
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