2007 2008 WORLDATWORK 34 TH survey ANNUAL
2007 2008 salarybudget WORLDATWORK 34 TH survey ANNUAL
Project Manager Kathryn Cohen, CCP, CBP, GRP Data Analysis Angela Woods Content Advisers Alison Avalos, CCP, CBP, GRP Jason C. Kovac, CCP, CBP, CPI Don Lindner, CCP, CBP, GRP Jim Stoeckmann, CCP Cheryl Stuck Editors Ryan M. Johnson, CCP Jean Christofferson Graphic Designer Kris Sotelo Global Headquarters 14040 N. Northsight Blvd. Scottsdale, AZ 85260-3601, U.S.A. Phone: 480/951-9191 Toll free: 877/951-9191 Fax: 480/483-8352 ISBN 978-157963-167-3 2007 WorldatWork About WorldatWork WorldatWork (www.worldatwork.org) is an international association of human resource professionals focused on attracting, motivating and retaining employees. Founded in 1955, WorldatWork provides practitioners with knowledge leadership to effectively implement total rewards compensation, benefits, work-life, performance and recognition, development and career opportunities by connecting employee engagement to business performance. WorldatWork supports its 30,000 members and customers in 30 countries with thought leadership, education, publications, research and certification. The WorldatWork group of registered marks includes: WorldatWork, workspan, Certified Compensation Professional or CCP, Certified Benefits Professional or CBP, Global Remuneration Professional or GRP, Work-Life Certified Professional or WLCP, WorldatWork Society of Certified Professionals, and Alliance for Work-Life Progress or AWLP. WorldatWork Journal, WorldatWork Press and Telework Advisory Group are part of the WorldatWork family.
Table of Contents Structure of the Report.................................. 1 Methodology.......................................... 1 Confidentiality Statement................................. 2 Industry Data.......................................... 3 Respondent Demographics............................... 4 United States Survey Highlights Executive Summary of Trends............................. 9 Salary Budget s................................. 10 Compensation Philosophy............................... 16 Lump-Sum s................................... 16 Percent of Employees Receiving a Base Salary....... 17 Salary Structure Adjustments............................. 18 Promotional s.................................. 22 Variable Pay.......................................... 23 Attraction and Retention Practices......................... 27 Global Comparison: Salary s Versus Rates of Inflation... 28 National Data Salary Budget s Nonexempt Hourly Nonunion Employees................................. 31 Salary Budget s Nonexempt Salaried Employees... 32 Salary Budget s Exempt Salaried Employees...... 33 Salary Budget s Officers and Executives.......... 34 Salary Structure Adjustments........................... 35 Major Metropolitan Areas Salary Budget s Nonexempt Hourly Nonunion Employees................................. 36 Salary Budget s Nonexempt Salaried Employees... 37 Salary Budget s Exempt Salaried Employees...... 38 Salary Budget s Officers and Executives.......... 39 Central Region Salary Budget s Nonexempt Hourly Nonunion Employees................................. 40 Salary Budget s Nonexempt Salaried Employees... 41 Salary Budget s Exempt Salaried Employees...... 42 Salary Budget s Officers and Executives.......... 43 Salary Structure Adjustments........................... 44 Eastern Region Salary Budget s Nonexempt Hourly Nonunion Employees................................. 45 Salary Budget s Nonexempt Salaried Employees... 46 Salary Budget s Exempt Salaried Employees...... 47 Salary Budget s Officers and Executives.......... 48 Salary Structure Adjustments........................... 49 Southern Region Salary Budget s Nonexempt Hourly Nonunion Employees................................. 50 Salary Budget s Nonexempt Salaried Employees... 51 Salary Budget s Exempt Salaried Employees...... 52 Salary Budget s Officers and Executives.......... 53 Salary Structure Adjustments........................... 54 Western Region Salary Budget s Nonexempt Hourly Nonunion Employees................................. 55 Salary Budget s Nonexempt Salaried Employees... 56 Salary Budget s Exempt Salaried Employees...... 57 Salary Budget s Officers and Executives.......... 58 Salary Structure Adjustments........................... 59 National Data Promotional s Budgeted Percent of Base Salaries Actual for 2007.............................. 60 Promotional s Percentage of Employees Receiving Promotional s Actual for 2006.......... 61 Promotional s Percentage of Promoted Employee s Base Salary Actual for 2006........................... 62 Variable Pay Nonexempt Hourly Nonunion Employees..... 63 Variable Pay Nonexempt Salaried Employees............. 64 Variable Pay Exempt Salaried Employees................ 65 Variable Pay Officers and Executives................... 66 Canada Survey Highlights Executive Summary of Trends............................. 67 Salary Budget s................................. 68 Compensation Philosophy............................... 73 Lump-Sum s................................... 73 Percent of Employees Receiving a Base Salary....... 74 Salary Structure Adjustments............................. 75 Promotional s.................................. 78 Variable Pay.......................................... 78 Attraction and Retention Practices......................... 80 National Data Salary Budget s Nonmanagement Hourly Nonunion Employees................................. 81 Salary Budget s Nonmanagement Salaried Employees.................................. 82 Salary Budget s Management Salaried Employees.. 83 Salary Budget s Officers and Executives.......... 84 Salary Structure Adjustments........................... 85 Regional Data Salary Budget s Nonmanagement Hourly Nonunion Employees................................. 86 Salary Budget s Nonmanagement Salaried Employees.................................. 86 Salary Budget s Management Salaried Employees.. 87 Salary Budget s Officers and Executives.......... 87 Participant Listing U.S. Firms............................................ 88 Canadian Firms........................................ 99 Survey Definitions..................................... 101 2007-08 Salary Budget Survey Questionnaire............... 102
Table of Figures Figure A: Industries with Reported Data...................... 3 Figure B: Number of Responses............................ 4 Figure C: 2007 Responses by U.S. Region.................... 4 Figure D: 2007 Responses by Canadian Province.............. 4 Figure E: 2007 Responses by U.S. Major Metropolitan Area...... 5 Figure F: 2007 Responses by Canadian Major Metropolitan Area..................................... 5 Figure G: U.S. Responses by Organization Size................ 5 Figure H: Canadian Responses by Organization Size........... 5 Figure I: U.S. Responses by Industry Classifications............ 6 Figure J: Canadian Responses by Industry Classifications....... 7 United States Survey Highlights Figure 1: Salary Budget s, by Type of......... 10 Figure 2: Salary Budget s, by Employee Category.. 11 Figure 3: 2007 Actual Salary Budget Data Responses Key Data Breakout.................... 12 Figure 4: Salary Budget Trends......................... 12, 13 Figure 5: Salary Budget s, by Region and Employee Category...................... 13 Figure 6: Salary Budget s, by Major Metropolitan Area............................ 14 Figure 7: Salary Budget s, by Major Industry Grouping............................ 15 Figure 8: Salary Budget s, by Organization Size... 15 Figure 9: Compensation Philosophy, by Employee Category..... 16 Figure 10: Lump-Sum s, by Employee Category........ 16 Figure 11: Percent of Employees Receiving a Base Salary in 2007, by Employee Category.................. 17 Figure 12: Percent of Employees Receiving a Base Salary in 2007, by Employee Category and Region........ 17 Figure 13: Salary Structure s, by Employee Category.... 18 Figure 13a: Salary Structure Data Most Common Responses, Actual 2007................... 18 Figure 13b: Salary Structure Data Most Common Responses, 2008................ 19 Figure 14: Organizations Reporting No Salary Structure (0%), by Employee Category.................... 19 Figure 15: Number of Since Last if No was Reported (0% or blank) and Most Common Responses............................. 19 Figure 16: Salary Structure Trends......................... 20 Figure 17: Salary Structure s, by Region and Employee Category...................... 20 Figure 18: 10-Year Perspective Salary Budget and Structure s................... 21 Figure 19: Promotional Budgets.................... 22 Figure 20: Promotional s.......................... 22 Figure 21: Use of Variable Pay............................ 23 Figure 22: Types of Variable Pay Programs.................. 23 Figure 23: Impact of Variable Pay on Budget Recommendations............................. 24 Figure 24: 2006-2008 Variable Pay Programs................. 24 Figure 25: 2006-2008 Variable Pay Programs by Region..... 25, 26 Figure 26: Programs Used to Attract and Retain Employees..... 27 Figure 27: International Remuneration 2007-08 Projections........................ 28-30 Canada Survey Highlights Figure C1: Salary Budget s, by Type of....... 68 Figure C2: Salary Budget s, by Employee Category................................ 69 Figure C3: Salary Budget Trends....................... 69, 70 Figure C4: Salary Budget s, by Major Industry Grouping............................ 70 Figure C5: Salary Budget s, by Province.............. 71 Figure C6: Salary Budget s, by Major Metropolitan Area............................ 72 Figure C7: Salary Budget s, by Organization Size.. 72 Figure C8: Compensation Philosophy, by Employee Category.... 73 Figure C9: Lump-Sum s, by Employee Category....... 73 Figure C10: Percent of Employees Receiving a Base Salary, by Employee Category............. 74 Figure C11: Percent of Employees Receiving a Base Salary, by Province....................... 74 Figure C12: Salary Structure s, by Employee Category.. 75 Figure C13: Number of Since Last if No was Reported (0% or blank).................. 75 Figure C14: Salary Structure Trends........................ 76 Figure C15: 10-Year Perspective Salary Budget and Structure s................................... 77 Figure C16: Promotional s......................... 78 Figure C17: Types of Variable Pay Programs................. 78 Figure C18: Impact of Variable Pay on Budget Recommendations............................. 79 Figure C19: 2006-2008 Variable Pay Programs................ 79 Figure C20: Programs Used to Attract and Retain Employees.... 80
Structure of the Report This report contains five sections. Section one presents the highlights and key findings of the U.S. data. Section two contains detailed U.S. data, broken out into industry and subindustry groups and regional categories. The regional categories for the United States are shown on the map below. Section three presents highlights and key findings of the Canadian data. Section four contains detailed Canadian data broken out by province and industry groups, as allowed by sample size. Finally, section five includes a list of participating organizations, definitions for terms used in the survey and a copy of the complete questionnaire used this year. Canadian data also is broken into four employment categories: Nonmanagement Hourly Nonunion Nonmanagement Salaried Management Salaried Officers/Executives. U.S. data is broken into four employment categories, with exemption status as defined by the Fair Labor Standards Act of 1938 (FLSA): Nonexempt Hourly Nonunion Nonexempt Salaried Exempt Salaried Officers/Executives. WESTERN CANADA CENTRAL EASTERN SOUTHERN Methodology On March 26, 2007, all U.S. and Canadian WorldatWork members received notification by electronic mail of the opening of the 2007-08 Salary Budget Survey. A total of 19,971 U.S. and Canadian members were invited to participate in the online data collection effort. When the survey officially closed on May 4, 2007, 2,516 responses had been received, a 13 percent response rate 1. Submissions from organizations with fewer than 10 employees and duplicate submissions from the same organization were eliminated from the data set. The final data contains 2,426 responses, analyzed by statistical software. A full list of organizations that responded to the survey can be found beginning on page 89. Survey instructions and post-survey data cleaning and verification help to ensure accurate recording of a response of 0 percent, versus a response that has been left blank. We have interpreted (and verified when possible) that a response of 0-percent to any given question is a conscious decision on the part of the organization not to budget for an increase that has typically been given. Survey instructions specifically ask respondents to leave a questionnaire item blank if the organization either does not have that plan item or does not typically budget for or pay out for that item based on the plan. Thus, a 0-percent response reflects a decision to specifically not budget funds for the period in question, versus a lack of existence, which would be represented by a blank response. Due to feedback from survey users, this report includes total salary budget increases by employee category with and without 0-percent responses, as indicated in Figures 2 and C2. 1 This reported response is almost certainly less than the actual response rate because surveys are sent to multiple members within the same organization, and one respondent may be answering for the organization on behalf of several other colleagues. WorldatWork 2007-08 Salary Budget Survey 1
Confidentiality Statement To ensure the anonymity and protection of participating organizations, WorldatWork does not publish or otherwise make available data points in which fewer than five survey participants responded. In addition, the data is not presented in a way, nor is it intended, to provide a competitive advantage for any participating organization. Although WorldatWork believes participant responses to the survey are honest and complete, the data presented in this report is provided without warranty of any kind for accuracy, omission, completion or timeliness. Except for the purposes intended by this publication, participants and purchasers of the WorldatWork Salary Budget Survey may not reproduce, redistribute, display, rent, lend, resell, commercially exploit, adapt or redistribute the data contained herein without the permission of WorldatWork. The data presented in this report was collected in April 2007 for publication in August 2007, a three-month duration between data collection and publication. 2 WorldatWork 2007-08 Salary Budget Survey
Industry Data Industry tables for both U.S. and Canadian data are based on participant self-reported codes using the North American Industry Classification System (NAICS). The two- and three-digit codes selected for use with the 2007-08 data set are presented in Figure A. All major industry codes (two-digit) were used regardless of total sample size, and some industry subsets (three-digit) were broken out because of sufficiently large sample size. This report follows the NAICS codes, with one exception: telecommunications (code 517), which resides as a subset of Information (code 51) in the NAICS. Due to the large sample size (n=49 United States and n=9 Canada) and for ease of reader use, telecommunications was taken out of the major group information, and placed into its own category for the 2007-08 report. The main industry categories report data for all respondents within the category, regardless of whether they also are reported in a subcategory. Industry subcategories that did not have an adequate response are not broken out in the report. Therefore, the sum of all subcategories may not equal the main industry category s sample size. The following is a list of industry categories reported. Full definitions for these industry categories can be found at the NAICS Web site (www.census.gov/epcd/naics02/). FIGURE A Industries with Reported Data Industry/Subindustry NAICS Code Industry/Subindustry NAICS Code Accommodation & Food Services 72 Administrative & Support & Waste Management & Remediation Services 56 Agriculture, Forestry, Fishing & Hunting 11 Arts, Entertainment & Recreation 71 Construction 23 Consulting, Professional, Scientific & Technical Services 54 Educational Services 61 Finance & Insurance 52 Credit Intermediation & Related Activities 522 Funds, Trusts & Financial Vehicles** 525 Insurance Carriers & Related Activities 524 Securities, Commodity Contracts & Financial Investments** 523 Health Care & Social Assistance 62 Hospitals* 622 Ambulatory Health Care, Nursing & Residential Care & Social Assistance* 621, 623, 624 Information 51 Internet Publishing, Broadcasting, Service Providers, Web Search Portals & Data Processing Services* 516, 518 Publishing Industries (except Internet)* 511 Motion Picture, Sound Recording, Broadcasting (except Internet) and Info Services* 512, 515, 519 Management of Companies & Enterprises 55 Manufacturing 31 Computer & Electronic Product Manufacturing** 334 Electrical Equipment, Appliance & Component Manufacturing** 335 Food, Beverage & Tobacco Product Manufacturing 311, 312 Machinery Manufacturing* 333 Metal Manufacturing 331, 332 Paper Manufacturing, Printing & Related Support Activities* 322, 323 Plastics & Rubber Products Manufacturing* 326 Textile Mills, Apparel, Leather & Allied Product Manufacturing* 313, 314, 315, 316 Transportation Equipment Manufacturing* 336 Wood, Petroleum, Furniture & Nonmet. Mineral Products, & Miscellaneous Manufacturing* 321, 324, 327, 337, 339 Mining 21 Public Administration 92 Real Estate, Rental & Leasing 53 Retail Trade 44 Telecommunications 517 Transportation 48 Air Transportation* 481 All Transportation* 482-493 Utilities 22 Wholesale Trade 42 Services (except Public Administration) 81 Religious, Grantmaking, Civic, Professional & Similar Organizations* 813 Chemical Manufacturing 325 * Only included in U.S. tables. ** Industry subcategories are joined in Canadian tables. WorldatWork 2007-08 Salary Budget Survey 3
Respondent Demographics In 2007, respondents were given the option of participating electronically, online. No paper surveys were sent to members unless specifically requested. Responses were distributed evenly geographically throughout the United States, providing good representation among all four U.S. regions. (See Figure C.) Canadian responses were more concentrated in the Ontario, British Columbia, Alberta and Quebec provinces. (See Figure D.) FIGURE B Number of Responses U.S. Canada 2004-2005 2,774 2,529 245 2005-2006 2,720 2,483 237 2006-2007 2,686 2,454 232 2007-2008 2,426 2,218 208 FIGURE C 2007 Responses by U.S. Region FIGURE D 2007 Responses by Canadian Province Central 1,219 Eastern 1,166 Western 1,092 Southern 1,089 Ontario 157 Alberta 111 British Columbia 110 Quebec 109 Manitoba 72 Note: The combined responses in Figure C and Figure D add up to greater than the total U.S. and Canadian responses because some participants answered for multiple regions or nationally, and thus, would be contained in multiple regions. Nova Scotia 68 Saskatchewan 68 New Brunswick 58 New Foundland 47 Prince Edward Island 34 Northwest Territories 19 Yukon 19 Nunavut 12 4 WorldatWork 2007-08 Salary Budget Survey
FIGURE E 2007 Responses by U.S. Major Metropolitan Area FIGURE F 2007 Responses by Canadian Major Metropolitan Area Chicago 513 Los Angeles 456 New York 453 Atlanta 395 Dallas 391 Boston 380 San Francisco 356 Houston 344 Denver 328 Toronto 125 Calgary 100 Montreal 98 Vancouver 92 Edmonton 67 Ottawa 67 Winnipeg 66 Quebec 52 Hamilton 41 Washington, D.C. 323 Phoenix 322 Minneapolis 316 Philadelphia 304 Seattle 293 San Diego 291 Detroit 272 San Jose 256 St. Louis 256 FIGURE G U.S. Responses by Organization Size 1 499 510 23% 500 2,499 808 36% 2,500 9,999 641 29% 10,000 19,999 139 6% 20,000+ 120 6% 2,218 100% Tampa 256 Baltimore 249 Portland 246 Miami 240 Cincinnati 239 Cleveland 230 Pittsburgh 223 FIGURE H Canadian Responses by Organization Size 1 499 83 40% 500 2,499 84 40% 2,500 9,999 28 14% 10,000 19,999 6 3% 20,000+ 7 3% 208 100% WorldatWork 2007-08 Salary Budget Survey 5
Respondent Demographics (continued) Survey respondents self-classified their industry using the North American Industry Classification System (NAICS). FIGURE I U.S. Responses by Industry Classifications NAICS Industry n Percent of Respondents 31 Manufacturing 566 25.5% 52 Finance and Insurance 348 15.7% 62 Health Care and Social Assistance 217 9.8% 54 Consulting, Professional, Scientific, and Technical Services 194 8.7% 51 Information 117 5.3% 44 Retail Trade 105 4.7% 92 Public Administration 98 4.4% 22 Utilities 93 4.2% 61 Educational Services 86 3.9% 48 Transportation 54 2.4% 42 Wholesale Trade 52 2.3% 517 Telecommunications 49 2.2% 81 Services (except Public Administration) 44 2.0% 21 Mining 37 1.7% 53 Real Estate and Rental and Leasing 34 1.5% 72 Accommodation and Food Services 33 1.5% 56 Administrative and Support and Waste Management and Remediation Services 25 1.1% 23 Construction 24 1.1% 71 Arts, Entertainment, and Recreation 17 0.8% 11 Agriculture, Forestry, Fishing and Hunting 15 0.7% 55 Management of Companies and Enterprises 10 0.5% 6 WorldatWork 2007-08 Salary Budget Survey
FIGURE J Canadian Responses by Industry Classifications NAICS Industry n Percent of Respondents 31 Manufacturing 52 25.0% 52 Finance and Insurance 30 14.4% 54 Consulting, Professional, Scientific and Technical Services 20 9.6% 48 Transportation 13 6.3% 44 Retail Trade 12 5.8% 51 Information 11 5.3% 92 Public Administration 10 4.8% 517 Telecommunications 9 4.3% 21 Mining 9 4.3% 81 Services (except Public Administration) 8 3.8% 62 Health Care & Social Assistance 6 2.9% 42 Wholesale Trade 6 2.9% 22 Utilities 5 2.4% 72 Accommodation and Food Services 4 1.9% 56 Administrative and Support and Waste Management and Remediation Services 4 1.9% 53 Real Estate and Rental and Leasing 4 1.9% 71 Arts, Entertainment & Recreation 2 1.0% 61 Educational Services 2 1.0% 11 Agriculture, Forestry, Fishing and Hunting 1 0.5% WorldatWork 2007-08 Salary Budget Survey 7
UNITED STATES Survey Highlights Executive Summary of Trends Executive Summary of Trends United States The WorldatWork 2007-2008 Salary Budget Survey reports the average 2007 total salary budget increase across all organizations, employee categories, regions and industries is 3.9 percent. This upward trend continues the recovery from 2003 and 2004, when budget increases hit an all-time low of 3.6 percent. Since 2004, salary budget adjustments have risen one-tenth of a percent each year. 2008 total salary budget increases are expected to flatten, with projections averaging 3.9 percent for the second year in a row. For the second year, the WorldatWork Salary Budget Survey captured data for major U.S. metropolitan areas. Of the areas surveyed, Washington, D.C. has the highest total salary budget increase average again this year, at 4.1 percent for all employee categories and industries. The average organization in the survey is awarding at least some base salary increase to about 92 percent of all employees in 2007, which is unchanged over the past two years. For all employee categories except officers/executives, actual 2007 salary structure increases remained constant, missing the mild projected growth from last year by 0.1 percent each. The officers/executives category not only missed its projected level-off, but it came in below the actual 2006 figure. Projections for 2008 are mildly optimistic, showing an expected 0.1 percent growth for each employee category, including officers/executives. In 2007 the percentage of organizations using variable pay increased slightly to 80 percent, up from 79 percent the prior year. This continued the steady upward trend in the use of variable pay by organizations. Of the organizations that use variable pay, special individual recognition awards continue to be by far the most prevalent. The 2007-2008 Salary Budget Survey reports data for more than 14.6 million U.S. employees from the organizations participating in the survey. Collected in April 2007, this data represents a broad range of industries, distributed fairly evenly across four regions of the United States. WorldatWork 2007-08 Salary Budget Survey 9
UNITED STATES Survey Highlights Salary Budget s Salary Budget s The average 2007 total salary budget increase across all organizations, employee categories, regions and industries is 3.9 percent. (See Figure 1.) This upward trend continues the recovery from 2003 and 2004, when budget increases hit an all-time low of 3.6 percent. Since 2004, salary budget adjustments have risen one-tenth of a percent each year. This slow but steady climb may briefly pause or come to a halt next year however, as 2008 total salary budget increases are expected to flatten, with projections averaging 3.9 percent for the second year in a row. Figure 1 also reveals the actual 2007 and projected 2008 salary increase figures by type of increase. Although general increase/cost-of-living adjustments (s) were projected to climb three-tenths of a percent, they actually declined slightly in 2007. But respondents are again optimistic reporting an expected growth in general increase/ budgets by 0.2 percent in 2008. Participating organizations reported a slight improvement for merit increases one-tenth of a percent over 2006, which met the projection from last year. While other increases were projected to decline slightly in 2007, they actually maintained at 1.2 percent. The slight decline in budgeting for other increases is predicted again for 2008. The relative changes in salary budgets, when broken out by type of increase, are not proportionate to the movement of the overall total salary budget increase percent over the past four years even though the year-to-year movement in the overall figure has remained consistent. Since 2004, total salary budget increases have modestly climbed from 3.6 percent to 3.9 percent, but general increase/ budgets have jumped 0.6 percent, twice the growth-rate of the total increase figure. And while the budget for merit increases specifically has climbed at the same pace as total salary budget increases also up 0.3 percent since 2004 the budgeted percent for other types of increases has only increased a tenth of a percentage point, and has not moved since 2005. Although the total salary budget increases for 2007 increased only slightly, the gap between the U.S. rate of inflation, as measured by the Consumer Price Index (CPI), and salary budget increases dramatically widened due to a drop in the CPI of almost a full percent since April 2006. Growth in salary budgets outpaced inflation by 1.2 percent to 1.5 percent in all employee categories. This disparity translates to the greatest purchasing power for employees since 2002. (Figure 18 on page 21 puts a 10-year history of salary budget trends into context with the CPI.) New this year, the WorldatWork Salary Budget Survey inquired about the impact of escalating health-care costs on salary budget recommendations. It would not have been surprising to find that organizations are reducing employee pay increases to minimize the impact of high health-care costs, ultimately suppressing growth in salary budgets. But 85 percent of respondents said that, at least when it comes to formulating salary budget recommendations, health-care costs are not a factor. FIGURE 1 Salary Budget s, by Type of Actual 2005 Actual 2006 2007 Actual 2007 2008 / 2.7% 2.8% 3.1% 2.7% 2.9% (n=883) (n=1,037) (n=726) (n=838) (n=627) 3.4% 3.5% 3.6% 3.6% 3.7% (n=6,426) (n=7,203) (n=6,321) (n=6,523) (n=5,761) 1.2% 1.2% 1.1% 1.2% 1.1% (n=1,504) (n=1,682) (n=1,392) (n=1,767) (n=1,526) 3.7% 3.8% 3.9% 3.9% 3.9% (n=7,067) (n=7,945) (n=6,884) (n=7,167) (n=6,285) Note: The three categories (/, and ) do not add up to the because not every organization provides all three types of increase. 10 WorldatWork 2007-08 Salary Budget Survey
The breakout of total salary budget increases by employee category reveals findings similar to the previously reported overall figures. (See Figure 2.) Excluding promotional increases (see page 22 for promotional increases), 2007 actual salary budget increases for all employee categories are equal to those projected one year ago, except for officers/executives, whose total salary budget increase of 4.1 percent exceeded projections by one-tenth of a percent. Projections for 2008 show potential stabilization, with all employee groups slated to receive the same salary budget increase percentages as in 2007, except for the officers/executives group, which is expected to slip back to 4 percent. Although 2007 is the first time in six years that officers/executives experienced salary budget growth above the 4-percent threshold, it s unclear whether there is long-term optimism or uncertainty, with 2008 projections back down to that mark. Figure 2 displays total salary budget increases by employee category, reported with and without respondents who reported a 0-percent increase. Although there has been a slight drop in the average number of months between increases over the past few years, roughly 97 percent of respondents in each employee category indicated they award increases exactly 12 months apart. Since 2005, as the average number of months between increases has slipped, the percentage of respondents who answered exactly 12 months has increased. UNITED STATES Survey Highlights Salary Budget s FIGURE 2 Salary Budget s, by Employee Category Salary Budget s (zeros included) Number of s Actual 2005 2006 Actual 2006 2007 Actual 2007 2008 Actual 2006 2007 Actual 2007 2008 Nonexempt Hourly Nonunion 3.6% 3.7% 3.7% 3.8% 3.8% 3.8% 12.0 11.9 12.0 11.9 Nonexempt Salaried 3.6% 3.7% 3.7% 3.8% 3.8% 3.8% 12.1 12.0 12.0 12.0 Exempt Salaried 3.7% 3.8% 3.8% 3.9% 3.9% 3.9% 12.1 12.0 12.1 12.0 Officers/Executives 3.8% 3.9% 3.9% 4.0% 4.1% 4.0% 12.3 12.2 12.3 12.2 Salary Budget s (zeros not included) Actual 2005 2006 Actual 2006 2007 Actual 2007 2008 Nonexempt Hourly Nonunion 3.6% 3.7% 3.8% 3.8% 3.8% 3.9% Nonexempt Salaried 3.7% 3.7% 3.8% 3.8% 3.9% 3.9% Exempt Salaried 3.8% 3.8% 3.9% 3.9% 4.0% 4.0% Officers/Executives 3.9% 3.9% 4.1% 4.0% 4.2% 4.1% WorldatWork 2007-08 Salary Budget Survey 11
UNITED STATES Survey Highlights Salary Budget s Figure 3 displays high and low values within the actual 2007 total salary budget increase data. The vast majority of responses fell within the 3-percent to 4-percent range once again this year. However for most of the key responses shown in Figure 3, the frequency declined this year indicating that there is more variety in the percent adjustments that organizations are making to their salary budgets. FIGURE 3 2007 Actual Salary Budget Data Responses Key Data Breakout 2007 Actual Salary Budget s Zero (0%) 0.1% to 1.0% 3% to 4% 7%+ Nonexempt Hourly Nonunion 1.3% 0.2% 72.6% 2.2% (7.0% to 13.5%) Nonexempt Salaried 1.3% 0.6% 73.1% 2.4% (7.0% to 13.7%) Exempt Salaried 1.1% 0.3% 71.3% 1.8% (7.0% to 15.0%) Officers/Executives 2.3% 0.2% 66.2% 3.4% (7.0% to 30.0%) FIGURE 4 Salary Budget Trends Nonexempt Hourly Nonunion Nonexempt Salaried Exempt Salaried Officers/Executives 1975 9.4% 8.9% 8.6% 1976 8.4% 8.2% 8.2% 1977 8.4% 8.2% 8.4% 1978 8.5% 8.4% 8.5% 1979 8.2% 8.0% 7.8% 1980 10.1% 9.9% 9.7% 1981 10.6% 10.5% 10.6% 1982 9.1% 9.1% 8.9% 1983 6.8% 6.9% 6.9% 1984 6.4% 6.5% 6.8% 1985 6.2% 6.4% 6.7% 1986 5.7% 5.9% 6.3% 1987 5.0% 5.2% 5.5% 1988 5.1% 5.2% 5.6% 1989 5.2% 5.4% 5.7% 1990 5.4% 5.5% 5.8% 1991 5.0% 5.0% 5.1% 1992 4.6% 4.7% 4.8% (Continued on page 13.) 12 WorldatWork 2007-08 Salary Budget Survey
FIGURE 4 Salary Budget Trends (continued) Nonexempt Hourly Nonunion Nonexempt Salaried Exempt Salaried Officers/Executives 1993 4.2% 4.3% 4.4% UNITED STATES Survey Highlights Salary Budget s 1994 4.0% 4.0% 4.1% 1995 3.9% 4.0% 4.1% 1996 3.8% 4.0% 4.1% 4.3% 1997 4.1% 4.1% 4.3% 4.5% 1998 4.1% 4.2% 4.5% 4.6% 1999 4.1% 4.2% 4.4% 4.5% 2000 4.3% 4.4% 4.6% 4.8% 2001 4.3% 4.4% 4.6% 4.7% 2002 3.7% 3.7% 3.9% 4.0% 2003 3.5% 3.4% 3.6% 3.6% 2004 3.5% 3.4% 3.6% 3.6% 2005 3.6% 3.6% 3.7% 3.8% 2006 3.7% 3.7% 3.8% 3.9% 2007 3.8% 3.8% 3.9% 4.1% 2008 3.8% 3.8% 3.9% 4.0% Figure 5 indicates that U.S. regional salary budget figures are generally following the national trend, although the central region is once again reporting 2007 actual salary budget increases of one-tenth of a percent below the national average. budget numbers for the regions in 2008 are also following the same trend lines; however, the central region is predicting a larger upswing than other regions, which would put it back on track with national and regional averages. FIGURE 5 Salary Budget s, by Region and Employee Category Central Eastern Southern Western Actual 2006 Actual 2007 2008 Actual 2006 Actual 2007 2008 Actual 2006 Actual 2007 2008 Actual 2006 Actual 2007 2008 Nonexempt Hourly Nonunion 3.6% 3.7% 3.8% 3.7% 3.8% 3.8% 3.6% 3.8% 3.8% 3.7% 3.8% 3.9% Nonexempt Salaried 3.6% 3.7% 3.8% 3.7% 3.8% 3.8% 3.7% 3.8% 3.8% 3.7% 3.8% 3.8% Exempt Salaried 3.7% 3.8% 3.9% 3.8% 3.9% 3.9% 3.8% 3.9% 3.9% 3.9% 3.9% 4.0% Officers/Executives 3.8% 4.0% 3.9% 3.9% 4.0% 3.9% 3.9% 4.0% 4.0% 3.9% 4.0% 4.0% WorldatWork 2007-08 Salary Budget Survey 13
UNITED STATES Survey Highlights Salary Budget s For the second year, the WorldatWork Salary Budget Survey captured data for major U.S. metropolitan areas. Of the areas surveyed, Washington, D.C. has the highest total salary budget increase average again this year, at 4.1 percent for all employee categories and industries. Houston which was toward the low end at 3.7 percent last year rose to 4 percent in 2007 and is the only other city at, or above, the 4-percent threshold. Four metropolitan areas are reporting more modest increases of 3.7 percent. Projections for most metropolitan areas reveal increases that are on pace with the national averages for 2008, with Boston and San Francisco expecting to reach the 4- percent mark next year. Pages 36-39 contain additional detail about salary budget increases for each major metropolitan area by employee category and type of increase. FIGURE 6 Salary Budget s, by Major Metropolitan Area Actual 2006 2007 Actual 2007 2008 NATIONAL 3.8% 3.9% 3.9% 3.9% Atlanta 3.6% 3.7% 3.8% 3.9% Baltimore 3.7% 3.8% 3.8% 3.9% Boston 3.7% 3.8% 3.9% 4.0% Chicago 3.7% 3.8% 3.9% 3.9% Cincinnati 3.6% 3.7% 3.7% 3.9% Cleveland 3.6% 3.7% 3.7% 3.8% Dallas 3.8% 3.8% 3.9% 3.9% Denver 3.8% 3.9% 3.8% 3.9% Detroit 3.6% 3.7% 3.7% 3.8% Houston 3.7% 3.9% 4.0% 3.9% Los Angeles 3.8% 3.9% 3.9% 3.9% Miami 3.7% 3.8% 3.8% 3.9% Minneapolis 3.6% 3.8% 3.8% 3.8% New York 3.8% 3.8% 3.9% 3.9% Philadelphia 3.7% 3.8% 3.8% 3.9% Phoenix 3.7% 3.9% 3.8% 3.9% Pittsburgh 3.6% 3.7% 3.8% 3.9% Portland 3.6% 3.7% 3.8% 3.9% San Diego 3.8% 3.9% 3.8% 3.9% San Francisco 3.8% 3.8% 3.9% 4.0% San Jose 3.7% 3.8% 3.8% 3.9% Seattle 3.7% 3.8% 3.9% 3.9% St. Louis 3.7% 3.8% 3.8% 3.8% Tampa 3.8% 3.8% 3.7% 3.9% Washington, D.C. 4.0% 4.1% 4.1% 4.1% 14 WorldatWork 2007-08 Salary Budget Survey
Figure 7 condenses the 44 specific industry groupings reported in Figure A on page 3 into the seven largest groupings historically reported by the WorldatWork Salary Budget Survey. The data shown in Figure 7 represent total salary budget increases for U.S. exempt salaried employees only. Although the public administration category experienced minimal growth in salary budget increases from 2002 to 2004, the industry grouping has seen considerable jumps over the past few years in both actual and projected figures, reporting a 4.3 percent total salary budget increase in 2007 the highest among these groups. All of the large industry groupings (with the exception of the transportation/utility industry) produced actual increase numbers for 2007 at, or above, levels projected a year earlier; and the 2008 projections for all major industries look to hover around 2007 actual figures. UNITED STATES Survey Highlights Salary Budget s FIGURE 7 Salary Budget s, by Major Industry Grouping Actual 2005 2006 Actual 2006 2007 Actual 2007 2008 Finance 3.8% 3.8% 3.9% 4.0% 4.0% 4.0% Manufacturing 3.6% 3.8% 3.7% 3.7% 3.8% 3.8% Public Administration 3.8% 4.0% 4.1% 4.1% 4.3% 4.2% Retail 3.6% 3.6% 3.7% 3.8% 3.7% 3.8% Service 3.5% 3.6% 3.7% 4.0% 3.9% 3.8% Transportation/Utility 3.6% 3.7% 3.8% 3.8% 3.7% 3.8% Wholesale 3.8% 3.9% 3.8% 3.9% 3.9% 3.9% Note: Data is for exempt salaried employees only. In addition to metropolitan area data, another new addition to last year s report was total salary budget increases by organization size, expressed in terms of number of employees (worldwide, if applicable). As displayed in Figure 8, there appears to be some correlation: The smaller the organization, the larger the salary budget increase. Organizations with 1-499 employees report actual total salary budget increases for 2007 of 4.1 percent, while companies of 20,000 or more full-time employees report 3.7 percent. Data from two of the five organization-size levels are projecting 2008 increases above this year s increases. FIGURE 8 Salary Budget s, by Organization Size Number of Employees Actual 2006 2007 Actual 2007 2008 1 499 4.2% 4.2% 4.1% 4.1% 500 2,499 3.8% 3.9% 3.9% 3.9% 2,500 9,999 3.8% 3.8% 3.8% 3.8% 10,000 19,999 3.6% 3.7% 3.7% 3.8% 20,000+ 3.7% 3.7% 3.7% 3.7% WorldatWork 2007-08 Salary Budget Survey 15
UNITED STATES Survey Highlights Compensation Philosophy Lump-Sum s Compensation Philosophy Figure 9 reveals data regarding the compensation philosophy of responding organizations. For the purpose of the survey, an organization s compensation philosophy is defined as a statement regarding where the organization prefers to pay its employees in relation to the market rate of pay. For the third year in a row, and as long as the survey has been asking for this data, a combined 9 out of 10 organizations indicate their compensation philosophy is to pay at, or above, the market rate of pay. For all employee categories, there was an increase of between 1 percent and 4 percent (versus 2006) in the number of respondents who indicate their organizations attempt to pay at the market rate, accounting for the slight shift from the number of organizations who desire to pay above the market. FIGURE 9 Compensation Philosophy, by Employee Category To pay below the market rate To pay at the market rate To pay above the market rate No formal compensation philosophy Nonexempt Hourly Nonunion 3% 82% 7% 8% Nonexempt Salaried 3% 86% 6% 5% Exempt Salaried 3% 82% 9% 6% Officers/Executives 2% 75% 15% 8% Lump-Sum s A lump-sum increase is defined as an increase in pay that is made in the form of a single cash payment. Lump-sum increases are often used in three circumstances: 1) when an employer wishes not to increase the employee s base pay due to budget constraints, 2) when an employee is reaching or exceeding the maximum of his or her salary range, or 3) when an employer is trying to give the employee more buying power at a specific point in time. In comparison to the 2006 survey, 2 percent to 3 percent more organizations across all employee categories are reporting that they award lump-sum increases. For the first time this year, the WorldatWork Salary Budget Survey also inquired about the percentage of employees who are actually receiving lump-sum increases. Forty-two percent of all organizations have a program in place to award lump-sum increases to exempt salaried employees, although only about 8 percent of exempt employees receive a lump sum increase. Similarly, 28 percent of organizations allow lumpsum increases for officers/executives, while only 12 percent of officers and executives actually receive such an increase. Although relatively large percentages of organizations award these types of increases (in the 30 percent to 40 percent range), it is clear that they actually are used quite sparingly, for only about 1 in 10 employees. FIGURE 10: Lump-Sum s, by Employee Category Percent of Companies Awarding Lump Sum s n Mean Percent of Employees Receiving Lump-Sum s Nonexempt Hourly Nonunion 571 36% 11% Nonexempt Salaried 470 39% 8% Exempt Salaried 897 42% 8% Officers/Executives 515 28% 12% 16 WorldatWork 2007-08 Salary Budget Survey
Percent of Employees Receiving a Base Salary The average organization in the survey is awarding at least some base salary increase to about 92 percent of all employees in 2007, which is unchanged over the past two years. As indicated in Figure 11, the second part of this question asked participants to compare the percentage of employees who will receive a base salary increase this year to the percentage of employees who received a base salary increase last year. The number of respondents who said the percent of employees receiving an increase this year is similar to last year went up by 1 percent to 3 percent in each employee category. Naturally, as the number of employees receiving an increase stabilizes, the percentage of respondents indicating a change in the number of employees receiving an increase will go down, as is the case for 2007. UNITED STATES Survey Highlights Employees Receiving a Base Salary FIGURE 11 Percent of Employees Receiving a Base Salary in 2007, by Employee Category Percent of Employees Receiving an in 2007 Larger Percent of Employees Receiving an in 2007 is than 2006 Similar Smaller Nonexempt Hourly Nonunion 91% 6% 90% 4% Nonexempt Salaried 92% 7% 89% 4% Exempt Salaried 92% 7% 89% 4% Officers/Executives 92% 7% 88% 5% When broken out regionally, it appears that a slightly smaller percentage of employees in each region will receive a base salary increase when compared to national data for 2007. The South and West show the largest disparity for each employee group 2 percent to 4 percent less than national figures. FIGURE 12 Percent of Employees Receiving a Base Salary in 2007, by Employee Category and Region Central Eastern Southern Western Nonexempt Hourly Nonunion 90% 90% 89% 89% Nonexempt Salaried 90% 91% 89% 89% Exempt Salaried 91% 91% 90% 90% Officers/Executives 90% 90% 88% 89% WorldatWork 2007-08 Salary Budget Survey 17
UNITED STATES Survey Highlights Salary Structure Adjustments Salary Structure Adjustments An organization s salary structure is a hierarchy of pay ranges with established minimums and maximums. Organizations frequently apply control points (often the midpoint) within each salary range and the collection of those control points determines the pay line. As a general rule, the numbers displayed in Figure 13 refer to the percent increase in the salary structure pay line encompassing all salary range control points. This year is the first time since salary structure adjustments hit an all-time low in 2004 that the size of actual adjustments did not increase over the previous year. In the 2006 survey, there was no projected growth in the structure for officers/executives. In 2007, that group not only missed the projected level-off, but it came in below the actual 2006 figure. For the other employee categories, actual 2007 salary structure increases remained constant, missing the mild projected growth from last year by 0.1 percent each. This is quite a shift from last year, which was the first time since 2001 that projected structure increases were met, and the jump in actual structure increases was the largest in 10 years. Projections for 2008 are mildly optimistic, showing an expected 0.1 percent growth for each employee category, including officers/executives. Because the rate of U.S. inflation (CPI) dropped 0.9 percent since April 2006, actual structure adjustments for all employee categories came in just below or at the inflation rate. (Figure 18 on page 21 puts a 10-year history of salary structure trends into context with the CPI.) FIGURE 13 Salary Structure s, by Employee Category Actual 2005 2006 Actual 2006 2007 Actual 2007 2008 Nonexempt Hourly Nonunion 2.1% 2.4% 2.5% 2.6% 2.5% 2.6% Nonexempt Salaried 2.2% 2.5% 2.6% 2.7% 2.6% 2.7% Exempt Salaried 2.2% 2.5% 2.6% 2.7% 2.6% 2.7% Officers/Executives 2.2% 2.5% 2.7% 2.7% 2.6% 2.8% Consistent with the minor changes to salary structure adjustments in 2007, the number of respondents who reported a 0-percent structure increase remained fairly consistent in comparison to 2006. (See Figure 13a.) Although there were fewer organizations prepared to give structure projections for 2008, there appears to be a significant decline in the number of organizations planning a 0-percent increase to salary structures across all employee categories. (See Figure 13b.) FIGURE 13A Salary Structure Data Most Common Responses Frequency of Response Actual 2007 Nonexempt Hourly Nonunion (Mean 2.5%) Nonexempt Salaried (Mean 2.6%) Exempt Salaried (Mean 2.6%) Officers/Executives (Mean 2.6%) 3.0% increase 20.6% 20.7% 20.8% 20.7% 2.5% increase 13.1% 15.1% 13.9% 13.4% 2.0% increase 11.9% 10.1% 10.6% 8.3% 0.0% increase 14.6% 12.8% 12.5% 16.4% 18 WorldatWork 2007-08 Salary Budget Survey
FIGURE 13B Salary Structure Data Most Common Responses Nonexempt Hourly Nonunion (Mean 2.6%) Frequency of Response 2008 Nonexempt Salaried (Mean 2.7%) Exempt Salaried (Mean 2.7%) Officers/Executives (Mean 2.8%) UNITED STATES Survey Highlights Salary Structure Adjustments 3.0% increase 30.5% 31.5% 31.5% 30.5% 2.5% increase 15.0% 17.5% 15.9% 15.6% 2.0% increase 16.8% 15.6% 15.7% 13.9% 0.0% increase 7.0% 4.9% 5.8% 7.3% FIGURE 14 Organizations Reporting No Salary Structure (0%), by Employee Category Actual 2005 2006 Actual 2006 2007 Actual 2007 2008 Nonexempt Hourly Nonunion 24% 13% 15% 6% 15% 7% Nonexempt Salaried 22% 11% 13% 6% 13% 5% Exempt Salaried 23% 12% 14% 6% 13% 6% Officers/Executives 29% 15% 18% 8% 16% 7% Among the organizations reporting no salary structure increases in 2007 (either 0-percent or blank), the average organization in the survey made a structure adjustment 19.8 months earlier although the most prevalent number of months since the last salary structure increases were 12 months, 24 months and 36 months, respectively. In comparison to last year, the median dropped 4 to 6 months across all categories. This change is reflected in the frequency of responses as well, with a much higher number of respondents reporting exactly 12 months since their last structure increase. (See Figure 15.) FIGURE 15 Number of Since Last if No was Reported (0% or blank) and Most Common Responses Frequency of Response Mean Median 12 months 24 months 36 months Nonexempt Hourly Nonunion 19.4 12.0 43.4% 20.3% 6.0% Nonexempt Salaried 20.4 12.0 51.1% 17.0% 9.6% Exempt Salaried 20.5 12.0 43.1% 19.9% 9.3% Officers/Executives 19.1 12.0 49.8% 20.7% 9.4% WorldatWork 2007-08 Salary Budget Survey 19
UNITED STATES Survey Highlights Salary Structure Adjustments FIGURE 16 Salary Structure Trends Nonexempt Hourly Nonunion Nonexempt Salaried Exempt Salaried Officers/Executives 1992 3.0% 3.2% 3.1% 1993 2.7% 2.8% 2.7% 1994 2.4% 2.5% 2.5% 1995 2.3% 2.4% 2.4% 1996 2.7% 2.8% 2.9% 3.0% 1997 2.5% 2.5% 2.7% 2.6% 1998 2.6% 2.7% 2.9% 2.7% 1999 2.6% 2.7% 2.9% 2.7% 2000 2.8% 2.8% 3.0% 2.9% 2001 3.0% 3.1% 3.2% 3.0% 2002 2.3% 2.4% 2.5% 2.4% 2003 2.0% 2.3% 2.1% 2.2% 2004 1.9% 2.0% 2.0% 2.0% 2005 2.1% 2.2% 2.2% 2.2% 2006 2.5% 2.6% 2.6% 2.7% 2007 2.5% 2.6% 2.6% 2.6% 2008 2.6% 2.7% 2.7% 2.8% FIGURE 17 Salary Structure s, by Region and Employee Category Central Eastern Southern Western Actual 2007 2008 Actual 2007 2008 Actual 2007 2008 Actual 2007 2008 Nonexempt Hourly Nonunion 2.5% 2.6% 2.5% 2.7% 2.5% 2.6% 2.5% 2.7% Nonexempt Salaried 2.4% 2.6% 2.5% 2.7% 2.5% 2.7% 2.5% 2.7% Exempt Salaried 2.6% 2.7% 2.6% 2.7% 2.6% 2.7% 2.6% 2.8% Officers/Executives 2.6% 2.7% 2.6% 2.7% 2.6% 2.7% 2.6% 2.7% 20 WorldatWork 2007-08 Salary Budget Survey
FIGURE 18 10-Year Perspective Salary Budget and Structure s 5.0 4.5 UNITED STATES Survey Highlights Salary Structure Adjustments 4.0 3.5 3.0 2.5 2.0 1.5 1.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Salary Structure 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 projected Nonexempt Hourly Nonunion 2.6% 2.6% 2.8% 3.0% 2.3% 2.0% 1.9% 2.1% 2.5% 2.5% 2.6% Nonexempt Salaried 2.7% 2.7% 2.8% 3.1% 2.4% 2.3% 2.0% 2.2% 2.6% 2.6% 2.7% Exempt Salaried 2.9% 2.9% 3.0% 3.2% 2.5% 2.1% 2.0% 2.2% 2.6% 2.6% 2.7% Officers/Executives 2.7% 2.7% 2.9% 3.0% 2.4% 2.2% 2.0% 2.2% 2.7% 2.6% 2.8% Salary Budget 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 projected Nonexempt Hourly Nonunion 4.1% 4.1% 4.3% 4.3% 3.7% 3.5% 3.5% 3.6% 3.7% 3.8% 3.8% Nonexempt Salaried 4.2% 4.2% 4.4% 4.4% 3.7% 3.4% 3.4% 3.6% 3.7% 3.8% 3.8% Exempt Salaried 4.5% 4.4% 4.6% 4.6% 3.9% 3.6% 3.6% 3.7% 3.8% 3.9% 3.9% Officers/Executives 4.6% 4.5% 4.8% 4.7% 4.0% 3.6% 3.6% 3.8% 3.9% 4.1% 4.0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 projected Consumer Price Index (CPI) 1.4% 2.3% 3.1% 3.3% 1.6% 2.2% 2.3% 3.5% 3.5% 2.6% Note: The Figure 18 table and corresponding graph show the relationship between salary structure increases, salary budget increases and the U.S. CPI for each employment category in the period 1998 to 2007. (CPI as reported by U.S. Bureau of Labor Statistics for all urban consumers for 12 months ending April 2007, www.bls.gov.) WorldatWork 2007-08 Salary Budget Survey 21
UNITED STATES Survey Highlights Promotional s Promotional s Close to a third of the organizations participating in this year s survey (31 percent) have a separate budget for promotions, an increase of 5 percent over last year. After FIGURE 19 Promotional Budgets trending around 25 percent to 30 percent for the last four years, it may be safe to assume this level is a new baseline for promotional increase budgets. 2005 2006 2007 Percent of organizations 28% 26% 31% with a separate promotional increase budget Percent without a separate 72% 74% 69% promotional increase budget The average budgeted percent for promotional increases as a percentage of total base salaries is 1.2 percent in 2007, with 0.5 percent and 1 percent being the most common responses reported. An average of 7.8 percent of employees received a promotional increase in 2006, which is a slight decline from 2005. (See Figure 20.) As a percent of the promoted employee s prior base salary, the average promotional increase in 2006 was 8.2 percent, two tenths of a percent higher than was reported for 2005. So it appears that while fewer employees received a promotional increase in 2006, the employees who did were awarded larger increases than the year before. FIGURE 20 Promotional s 2005 2006 2007 Percentage of Employees 8.4% 7.8% (a); Receiving Promotional s 7.0% (b) Budgeted Percent of 1.4% (a); 1.5% (a); 1.2% (a); Base Salaries 1.0% (b) 1.0% (b) 1.0% (b) Percentage of Promoted 8.0% 8.2% (a); Employee s Base Salary 8.0% (b) (a) Mean (b) Median 22 WorldatWork 2007-08 Salary Budget Survey