ERI Survey Shows 2009 Salary Increases of 4 Percent Planned

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<strong>Redmond, Wash. &mdash; April 15 </strong><br />Despite a U.S. economy facing ballooning medical and energy costs, ever-increasing federal debt and slumping housing and financial sectors, the early look at 2009 from ERI Economic Research Institute&rsquo;s evergreen Salary Increase Survey reports an average salary budget increase of about 4 percent for 2009, down only slightly from the 2008 level of 4.1 percent. While this may appear to be a minor decrease, it may be significant because it represents a distinct change in direction, as recent years have seen modest increases in salary and incentive budgets. <br /> <br />The salary increase received by any individual employee may be very different from 4 percent, as increases tend to be more and more based on what a person does and the industry of his or her employer. In general, individuals who earn less are seeing lower increases, while more skilled and higher earning individuals within certain job groups receive more. <br /> <br />&ldquo;The quickest way for companies to cut payroll costs is to lay off personnel,&rdquo; reported Dr. David J. Thomsen, ERI director. &ldquo;This will be followed by those who freeze salaries across the board, and we are not seeing that yet. U.S. companies are in a bind for talent and skilled knowledge workers. ERI is looking, but we&rsquo;ve not seen evidence of anything other than concern about the pay of key staff, from those of our 15,000 subscribers who are entering data into our ongoing survey. There&rsquo;s no recession for key skills and talent. The major disconnect is between wage increases and what&rsquo;s happening with cost of living.&rdquo;<br /><br />ERI Economic Research Institute has been providing estimates of salary structure, budget and merit increases since 1987. ERI uses this data in its Assessor Series compensation survey software that creates reports and analyses used by subscribers to set pay for more than 10 million employees. While other salary increase reports are based on information from a limited number of organizations on what they are projecting to pay &mdash; for example, traditional surveys ask what increases are projected for January 2009 &mdash; ERI collects data throughout the year from its subscribers, allowing a continuously updated and detailed report that tracks trends much more precisely. <br /><br />The 2009 ERI Salary Increase Report released in March 2008 finds that U.S. employers will award average pay increases of 4 percent in 2009, slightly less than they have granted or plan to grant in 2008 (4.1 percent). According to Thomsen, &ldquo;Salary increase plans might also be modified, for example, when key employees are asked to do more with fewer staff resources; we are already seeing that with the growth in unemployment. And we are still seeing certain skills groups experiencing 6 to 7 percent increases, perhaps because of the freeze on H-1B visas and the fact that the U.S. educational system is training our youngsters for nonexistent jobs.&rdquo;<br /> <br />The detailed findings reveal the variation within these averages:<br /><br /><ul><li><strong>By industry: </strong>Employees in petroleum and coal, health care and consulting services should expect higher than average increases, while those in real estate, air transportation and paper/wood products will lag (ERI&rsquo;s Assessor Series tracks 1,600 SIC and NTEE industry categories).</li><li><strong>By state: </strong>Employees in Vermont will receive slightly higher than the average increases, while those in Wyoming and West Virginia should expect less. </li></ul><p><br />The complete 343-page 2009 ERI Salary Increase Survey provides information on what increases were paid last year and what is expected for the coming year by industry, broad job function, individual job title and geography. </p>

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