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Salary Budget Projections of 2012
| Guest post by: Jennifer Loftus |
Article Overview: It’s that time of the year when Human Resource professionals are asked by senior management to provide compensation program budget projections for the upcoming fiscal year. Two authoritative sources are now available: the WorldatWork 2011-2012 Salary Budget Survey and the Mercer 2011/2012 Compensation Planning Survey.
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Salary Budget Projections of 2012
You would have to live a very sheltered life to not know
that the United States economy is full of uncertainty as we head towards 2012.
ReadThe Wall Street Journaland you find articles such as:
“NEW YORK (Dow Jones)-- Goldman Sachs downgraded its
forecast for U.S. growth Friday, saying there is now a one-in-three chance the
U.S. will lapse back into recession. U.S. unemployment also will edge up to
9.25% by the end of 2012, the firm's U.S. economists said. Still, ‘even our new
forecast is subject to meaningful downside risk,’ the economists said. A
worsening European financial crisis--and the failure of European policy makers
to respond adequately--could worsen the global economic outlook, they said. The
firm lowered its forecast for U.S. real gross domestic product, expecting 2% to
2.5% growth through 2012. The forecast for annual average GDP growth has fallen
to 1.7% in 2011 (from 1.8%) and to 2.1% in 2012.”
However, we continue to hear from concerned clients that
regardless of the continued economic uncertainty they need to position
themselves to retain top talent and attract selective staff to be ready for the
recovery, whenever it begins. With that in mind the following is a summary
from the two most recent compensation planning surveys regarding projections
for 2012 salary adjustments.
|
Year
|
WorldatWork
|
Mercer
|
|
2009
|
2.5%
|
2.1%
|
|
2010
|
2.7%
|
2.3%
|
|
2011
|
3.0%
|
2.5%
|
|
2012
|
3.0%
|
2.9%
|
Compensation Planning Data by Industry
There has been little change in salary increase budgets from 2009 to 2012. Many feel that the 2012 numbers, collected in the spring prior to the latest economic turbulence, are optimistic. The below 3.0% trend can also be found in industry specific and employee type projections:
|
Industry
|
WorldatWork
|
Mercer
|
|
Education
|
2.8%
|
3.0%
|
|
Healthcare
|
3.0%
|
2.8%
|
|
Retail
|
3.0%
|
2.7%
|
|
Banking
|
2.8%
|
2.8%
|
|
Hospitality
|
3.0%
|
2.9%
|
|
Utilities
|
3.0%
|
3.0%
|
|
Telecommunications
|
3.0%
|
3.1%
|
|
Professional Services
|
3.0%
|
3.5%
|
|
Oil & Gas
|
4.0%
|
3.7%
|
|
|
WorldatWork – Executive
|
Mercer – Executive
|
|
2009
|
2.0%
|
1.9%
|
|
2010
|
2.7%
|
2.3%
|
|
2011
|
3.0%
|
2.7%
|
|
2012
|
3.0%
|
2.9%
|
|
|
WorldatWork – Professional
|
Mercer – Professional
|
|
2009
|
2.5%
|
2.2%
|
|
2010
|
2.7%
|
2.3%
|
|
2011
|
3.0%
|
2.7%
|
|
2012
|
3.0%
|
2.9%
|
|
|
WorldatWork – Non Exempt Hourly
|
Mercer – Non Exempt Hourly
|
|
2009
|
2.6%
|
2.2%
|
|
2010
|
2.7%
|
2.3%
|
|
2011
|
3.0%
|
2.7%
|
|
2012
|
3.0%
|
2.9%
|
Recommendations for 2012
So what are we to make of all this? Based on recent discussions with clients in a variety of industries and areas around the country we are hearing the following:
- In the nonprofit healthcare sector we are starting to see the return of critical clinical staff shortages (RNs, Physical Therapists, and others). This automatically artificially inflates compensation budgets, especially when organizations get involved in a bidding war for talent.
- In all sectors we continue to see the establishment of market-based job families, such as administrative, service, and engineering, which allow the organization to set its budget based primarily on current supply and demand trends impacting a particular job family rather than the system as a whole.
- Increased interest in creative compensation models including career paths and various forms of incentives / bonuses. Many have elected to focus their resources in funding these programs while leaving base pay alone.
- Many organizations have returned to “job enlargement” programs where job responsibilities are expanded to include those from multiple jobs. This approach allows for an “in-grade” promotion where base pay can be adjusted to reflect the increased responsibilities.
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Article Tags: 2012 Salary Budgeting, Economic Budgeting, Salary 2012
|
About the Author: Jennifer Loftus RSS for Jennifer's articles - Visit Jennifer's website Click here to visit Jennifer's website   Back to School Part 23 Internships Creating an Internship Experience That Benefits Both Parties Effectively Dealing with Poor Management Civility in the WorkplaceIs it Decreasing How to Deal Office Disputes The ROI of Employee Engagement |
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