Compensation association says low inflation, soaring benefit costs temper wage increases in the U.S. and Canada
Nearly nine out of 10 workers in North America will get a raise this year, according to the annual WorldatWork Salary Budget Survey.
Organizations indicated that 87 per cent of employees will receive an increase in base pay this year, up from 83 per cent in 2003. The average base pay increase for 2004 is 3.5 per cent, a figure WorldatWork called “lackluster.”
“After seeing salary budgets sink to historic lows in 2003, this year’s instalment duplicated those historic lows,” it said in a press release.
The survey is based on responses from 2,774 WorldatWork members who are employed in the compensation and benefits departments of mostly large companies in North America. Combined, the survey’s participating organizations represent about 12.7 million employees in the U.S.
The 3.5 per cent average salary budget increase fell short of the projected 3.7 per cent average increase employers estimated last year. Company predictions for 2005 look slightly better than the 2004 actual figures, with a projected increase of 3.7 per cent.
“The continuing lackluster increases in salary budgets must be taken in context with relatively low inflation rates and high benefits costs,” said Anne C. Ruddy, executive director of WorldatWork.
The survey also indicated that 77 per cent of employers will link pay to performance this year, up from 75 per cent in 2003 and way up from 66 per cent in 2001.
“We’re encouraged to see employers link pay to performance, which will be instrumental in retaining key employees as the economy improves and employees start looking around,” said Ruddy.
WorldatWork is a non-profit association dedicated to compensation, benefits and total rewards. It’s headquarted in Scottsdale, Ariz., and has a Canadian office in Toronto.
Organizations indicated that 87 per cent of employees will receive an increase in base pay this year, up from 83 per cent in 2003. The average base pay increase for 2004 is 3.5 per cent, a figure WorldatWork called “lackluster.”
“After seeing salary budgets sink to historic lows in 2003, this year’s instalment duplicated those historic lows,” it said in a press release.
The survey is based on responses from 2,774 WorldatWork members who are employed in the compensation and benefits departments of mostly large companies in North America. Combined, the survey’s participating organizations represent about 12.7 million employees in the U.S.
The 3.5 per cent average salary budget increase fell short of the projected 3.7 per cent average increase employers estimated last year. Company predictions for 2005 look slightly better than the 2004 actual figures, with a projected increase of 3.7 per cent.
“The continuing lackluster increases in salary budgets must be taken in context with relatively low inflation rates and high benefits costs,” said Anne C. Ruddy, executive director of WorldatWork.
The survey also indicated that 77 per cent of employers will link pay to performance this year, up from 75 per cent in 2003 and way up from 66 per cent in 2001.
“We’re encouraged to see employers link pay to performance, which will be instrumental in retaining key employees as the economy improves and employees start looking around,” said Ruddy.
WorldatWork is a non-profit association dedicated to compensation, benefits and total rewards. It’s headquarted in Scottsdale, Ariz., and has a Canadian office in Toronto.
