Pay Increase Budgets Increase in 2007

The newly released Compensation Data annual survey results showed preliminary pay increase budgets were reported at 3.65 percent for 2007 and are projected to be 3.63 percent in 2008. These findings show a small increase from pay increase budgets in 2006, which were reported at 3.53 percent.

From 2003 to 2006, pay increase budgets have hovered around 3.5 percent and were the highest in 2003 when they reached 3.57 percent. The following year, they dropped to 3.47 percent, and at the most, have varied by .10 percent for the last five years. This is consistent with this yearís increase of .12.

Pay increase budgets vary slightly by industry. Preliminary results for Compensation Data 2007 showed companies in the service industry had the highest pay increase budget, 4.46 percent. Organizations in distribution and warehouse had the lowest with 3.41 percent, according to the newly released results. While many have talked about hiring shortages in health care, pay increase budgets have changed little from 2006 when they were 3.55 percent.

To attract and retain top performers, employers should ensure theyíre offering a complete compensation package, said Amy Kaminski, manager of marketing programs for Compdata Surveys. Because not all employees are motivated by routine raises, organizations should look to other methods to boost their compensation packages. These could include increased time off and the introduction of flexible schedules.