Companies plan raises for 2011, up 0.4 percent from 2010

PHILADELPHIA – You may see an increase in your salary next year but not by much, The Wall Street Journal reported on Monday.
Companies are planning to increase their salary budget by a median of 2.8 percent in 2011, compared with a median 2.4 percent in 2010, the newspaper said, citing a survey by management consulting firm Hay Group.
The anticipated raises are still below the 4 percent yearly increases seen in 2005 to 2007, however.
The energy and life sciences industries expect the largest raises at 3.6 percent and 3.3 percent, respectively. On the other hand, the financial services industry has the smallest expected increase at 2.9 percent.
Only 4 percent of companies have or are considering pay cuts while 18 percent are looking at pay freezes; 17 percent are considering reducing retirement benefits, the Hay Group study revealed.
“As long as the economy is sputtering, raises will gradually inch upward, but many companies will be conservative in increasing their base costs,” said Tom McMullen, North American reward practice leader for Hay Group, according to WSJ.
“You’ll get significant raises when companies have to compete for talent, but that won’t be the case for all employees,” said Nariman Behravesh, chief economist for IHS Global Insight, while noting that currently there is low competition for workers.