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Benefits December 8, 2009
Hay Group Finds Employers Revising Down Projected Salary Increase
December 8, 2009 (PLANSPONSOR.com) - U.S. employees can expect median pay increases of 2.5% in 2010, according to a new Hay Group study.
Reported by Rebecca Moore
A press release said the 2.5% projection is the lowest
planned increase in the last decade and is also lower than the forecasted 3%
increase cited in Hay Group’s July survey. Mel Stark, vice president in the
Reward Practice at Hay Group, said about a quarter of companies decreased
salary increase projections in the last four months.
Planned increases are generally consistent for
executives, middle management, supervisory, and clerical positions, but Hay
Group’s research found that base salary increases are healthier in industry
sectors such as life sciences, energy, and financial services, and not as
strong in the health care, health insurance, and industrial sectors.
In addition, according to the press release, at least 30%
of the approximately 40% of organizations that reported in early 2009 that they
had either reduced or eliminated their 401(k) employer contributions say they
are planning to reinstate the matches as of 2010. More than 35% of organizations
with defined benefits plans previously indicated they intend to freeze their
plans in some form, and the latest data survey found no reverse in this trend.
Most organizations have also looked carefully at their
health care costs for 2010 and are increasing employee costs either through
direct increases in contributions or changes to deductibles and copayments.
Other alternatives being considered include additional medical options and designs
which encourage behavioral changes in utilizing medical services.