According to results from the 2010-2011 Culpepper Salary Budget & Planning Survey, reported in a recent article on the SHRM website entitled Global Salary Increase Budgets for 2010 and 2011, “Salary budgets for 2011 are projected to continue rising after hitting historic lows in 2009. Projected budgets for 2011, including salary increases, promotional increases and variable incentives, are all higher than 2010. Furthermore, the number of companies reporting salary freezes has declined significantly, and salary reductions have nearly disappeared.”
What does this mean for you? Well, like most things, it depends which side of the fence you’re on. What may be great news for employees may be not so great news for businesses who are once again about to see their fixed costs rise. Smart companies learned their lesson during the downturn, and never want to be confronted again with runaway salary costs leading to layoffs and cuts. How can you avoid this? Simple. Rather than starting the long slow progression to higher base salaries, why not shift some of those dollars to variable pay (i.e., incentives)? That way, you can limit your expenditures to only those employees who generate meaningful outcomes that help your business become (or stay) more competitive. But either way, it’s time for you to plan your next move carefully. Read on for more details…
Based on data from 933 organizations in 90 countries, some of the key findings are:
• Salary increases rise. Average global base salary increases across all jobs and locations are projected to jump from 2.59 percent in 2010 to 3.14 percent in 2011.
• Salary freezes continue to thaw. The number of companies freezing salaries is projected to decline sharply from 14 percent in 2010 to 4 percent in 2011.
• Very few companies cutting salaries. Only two-tenths of 1 percent of companies plan to cut salaries in 2011.
• U.S. salary increases. Base salary increases in the United States are projected to rise from 2.38 percent in 2010 to 2.91 percent in 2011.
• Technology, life science and energy sectors lead the way. Base salary increases in technology, life science and energy sectors are projected to outpace other sectors in 2011.
• Salary range structure increases. Average global salary range structure increases across all jobs and locations are projected to rise from 1.41 percent in 2010 to 2.10 percent in 2011.
• Most companies aim to match or lead market pay rates. Nearly 70 percent of companies have a base salary philosophy with an objective to match or lead the market, and they have salaries at or above current market levels.
Be sure to read the full article to view several enlightening graphs and charts on pay trends, base salary increases by region, base salary increases by type of company.