WorldatWork 2011-2010 Salary Budget Survey

Salary Budget Survey: Salaries Can’t Keep Up With Inflation

WorldatWork’s 2011-2010 Salary Budget Survey - For the first time since 1980 the U.S. rate of inflation is higher than the average salary budget increase. During the 12-month period ending April 2011, the Consumer Price Index was 3.2%. Average pay increases for the same period? 2.8%.

Why haven’t pay increases kept up with the rate of inflation? A host of factors — particularly high unemployment – are conspiring to keep salary increase budgets low.

With the nation’s unemployment rate averaging 9.4 percent, the law of supply and demand is at play. Salaries may only see significant improvement if unemployment decreases, which would put pressure on employers to raise wages in order to stay competitive.

Successful organizations will not pay more than necessary for any expenditure, and with low risk of losing employees to other organizations, higher increases are not justified at this time,” explained Don Lindner, senior practice leader at WorldatWork, a global HR association headquartered in Arizona.

Skeptics need only look at companies in mining, quarrying, oil and gas. Because these industries are currently experiencing a shortage of skilled labor, their 2012 planned salary budgets are above average, at 4.1%.

U.S. employees in other industries, on the other hand, can expect average pay increases of 2.9% in 2012, though it may be closer to 4.0% for high performers.

About the Salary Budget Survey

The “WorldatWork 2011-2010 Salary Budget Survey” includes data from more than 2,400 participants, representing nearly 15 million U.S. employees. The data, collected in April 2011, represents a wide variety of U.S. companies and industries, distributed across all 50 states.