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Business

Outlook on pay raises

Dollars

Dollars Photo Credit: iStock

Many of us working stiffs can file this story under the category of “dream on.”

After a year of pay freezes and amid signs of an economic recovery, 98 percent of companies plan to raise employees’ pay in 2011, according to a survey by Mercer, the Manhattan-based consulting, outsourcing and investment-services firm.

Meanwhile just 2 percent plan across-the-board salary freezes in 2011, compared with 13 that expect to deep-freeze salaries in 2010 and 31 percent that froze pay in 2009.

The increase is expected to average 2.9 percent, up from the expected 2.7 percent in 2010 and down from the 3.2 percent average in 2007. But some employers plan to award top talent even more.

On Long Island, wages averaged $50,833 in 2009, up 1.1 percent from 2008, according to state Labor Department data.

Among the companies planning to raise wages, their thinking is based on old-school fundamentals, the kind that prevailed before the worse economic downturn since the Depression began in December 2007: Companies are once again concerned about the flight of top talent as the economy and competition heat up.

“It looks like salary raises are back and for good reason," said Catherine Hartmann, a principal with Mercer's rewards consulting business. “The risk of losing key employees is top of mind as the economy recovers and certain labor markets improve. And while non-monetary awards such as career development and training are effective in retaining employees, employers realize that top-performing employees are loathe to going another year without an increase in pay.”

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Read more of Inside Long Island Business

 

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