| Even though the economy is looking slightly better and businesses are starting to expand, employers are being careful when it comes to increasing salary budgets for 2007.
Employers are focusing on awarding only high-performing individuals or those with skills in demand.
According to Mercer’s 2006/2007 U.S. Compensation Planning Survey, 2006 salary increases will be slightly higher at 3.7 percent, compared to 3.6 percent in 2005. The projected increase for 2007 is expected to remain stable at 3.7 percent as well.
Washington Employers Association’s 2006/2007 Wage & Salary Adjustment Survey, which provides comparative data for the local area, was also released in September.
According to the Mercer survey, instead of increasing base salaries employers are concentrating on other means of rewarding employees; such as variable pay, spot cash, project milestone awards and signing bonuses.
Spot cash awards are very popular among the information technology industry (85 percent), accounting and finance industry (78 percent), human resources industry (73 percent) and the sales and marketing industry (69 percent).
Along with identifying and rewarding their top employees, some companies have begun focusing on developing their employees’ talents by engaging in long-term development approaches, such as formal career planning or competency-based performance management.
Other findings in the survey:
- 85 percent of companies intend to offer short-term
incentives to employees.
- 71 percent of companies offer formal non-monetary awards.
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