Study: Small Wage Increases Expected in 2009
Posted on September 2, 2008
The Associated Press reports that a new study from Hewitt Associates found that base pay will climb only by an average of 3.8% in 2009. However, performance-based payments are expected to climb.
A study released Tuesday by Hewitt Associates, a human resources consulting firm, found base pay will rise by 3.8 percent in 2009, marking the seventh consecutive year of flat growth.Wages have barely been keeping ahead of inflation over the past several years and earlier this year inflation overtook wage increases. A post on a New York Times blog shows that earlier this year wages were not keeping up with inflation for many employees meaning employees were actually taking home less pay.One-time performance-based pay, however, is expected to grow by 10.6 percent. That's down slightly from 10.8 percent this year and 11.8 percent in 2007.
Performance-based rewards are popular since they don't commit companies to ongoing costs, said Ken Abosch, leader of Hewitt's compensation consulting business. The survey measured one-time performance-based awards and did not include raises based on performance.
"Most of the compensation growth today comes from (one-time merit-based) pay - it accounts for almost three-quarters of the increase," he said.
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