Posted by: Jena McGregor on August 17, 2009
AIG’s new CEO may be taking home a $7 million salary, but average workers, and even average executives, got the lowest pay increase on record last year. Human resources consulting firm Hewitt Associates released its annual salary survey last week, and found that salary increases for 2009 were below 3%, on average, for the first time in the 33 years it has been keeping records.
Base salary raises for non-hourly paid professionals were just 1.8 percent, down from 3.7% last year. Hourly workers raises were 1.9 percent, while executives’ were just 1.4%. Nearly half of companies (48 percent, Hewitt reports) froze salaries last year.
At the same time, however, companies are putting a greater percentage of workers’ pay at risk. “Variable pay” as a percentage of payroll was the highest on record, clocking in at 12.0 percent, up from just five to six percent 15 years ago. In other words, while companies are paying less, they’re also making you work harder and perform better to get the pay you do receive.
Hewitt’s study also had some interesting findings about regional differences in salary increases. Houston is expected to have the largest increase in 2010, at 3.4 percent, followed by Minneapolis/St. Paul and Washington D.C. (each 3 percent). Meanwhile, the lowest increases next year are expected to come in Detroit (2.1 percent), Los Angeles (2.2 percent) and San Francisco (2.4 percent).
There is good news: 2010 is supposed to be better for everyone, at least when it comes to raises. The average base pay increase for salaried workers in 2010, if still below the historical 3% barrier, is projected to jump to 2.7 percent.
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