Finding Percentages in Salary Increase for 2008
I blogged a while ago about salary predictions for 2007; what about finding percentages in salary increase for 2008? That was the topic of a Money.CNN.com article. Everyone’s situation is different, but the average pay increase doesn’t look too impressive in 2008, according to a salary survey by human resource consulting firms Hewitt and Mercer. They are surveying up to 1,000 companies, and so far their preliminary salary survey results show an average pay increase of 3.8 percent next year.
According to Ken Abosch, the head of Hewitt Associate’s compensation practice, the typical pay raise increase is expected to be tame even for star employees. Because base salary is one of a company’s largest expenses, there’s a push to keep a lid on fixed costs. That said, the area where employees may earn more money will be in bonuses. Of course, there are always exceptions; will you get a raise in 2008? Keep reading!
Wondering how to calculate a pay increase? Find out with our salary calculator.
Why does management use across-the-board pay increase?
In a perfect world, companies pay higher salaries (and increases) to their best employees, and lower salaries to poor employees, but Ken Abosch says, “But the reality is companies don’t do a good job taking money away from average or below average employees. The net result is like spreading peanut butter across the organization.” Abosch says that, in 2007, companies budgeted three times as much for bonuses as they did for base pay increases.
Finding Percentages in Salary Increase
So how does bonus pay look in 2008? Abosch says bonuses range from 5 percent of pay up to 40 percent, with entry level employees getting the lower end, mid-level employees (15 percent to 20 percent) and finally upper-level management (30 percent to 40 percent). However, many times bonuses are not clearly written out, companies may just suddenly announce that you’re getting one.
Wage and Salary Increase Guidelines vs Health Care
However, you may lose that pay increase (or bonus) to your health care costs, which are expected to go up. Abosch told Money.CNN.com, “In general we’re still seeing double-digit increases in healthcare costs. And most employers are passing the majority of that increased cost directly to employees.” A Hewitt analysis found that initial 2008 rate increases for HMOs were averaging 14.1 percent (based on HMO rates at 160 large companies).
How does your salary look in 2007? PayScale Salary Calculator is a quick and easy way to compare positions. When you want powerful salary data and comparisons customized for your exact position, be sure to build a complete profile by taking PayScale’s full salary survey.
Dr. Al Lee