HR: Pay Increases in 2010
As the economy starts to show signs of improvement and the recession gives way to recovery, more employers are planning to grant pay increases in 2010. According to a recent survey on pay trends, the number of organizations planning on freezing salaries has declined in comparison to last year. While many employers have been struggling for the past 18 months to cut costs and trim staffs- they are more optimistic about the economy in the coming year and plan to reward employees with raises.
According to the survey, that included responses from 350 employers across the US, company wide salary freezes planned for 2010 has fallen to 14%, compared to an estimated 30% of companies that had freezes this year. (An improvement of 16%) Of those employers planning on granting pay increases the average increase is expected to be 2.7% in 2010- down from an actual 3.2% in 2009.
Even with a smaller increase expected, overall it is still positive news for employees and definitely a much better outlook than this time last year. Increases of any amount are encouraging, especially after employees have suffered through not only salary freezes- but furloughs, pay cuts and layoffs.
As the economy gets stronger, many companies are once again focusing their attention on attracting and retaining employees and engaging top talent. Given the times though, it might be wise to be cautious with salary increases going forward. Workforce needs should be carefully evaluated as businesses continue to juggle selective hiring with selective cuts in staff. In addition to incentive pay strategies- recognition programs, career development and training opportunities are all tactics that can help companies stay competitive as business begins to improve.