Newswise — Pay increases for most salaried workers will average only 3.5 percent this year and stay at that level through 2007, The Conference Board reports today.
For the fourth consecutive year, salary increases are below 4 percent as employers keep the lid on budgets.
"Moderate inflation has allowed employers to continue to control payroll costs," says Charles Peck, compensation specialist at The Conference Board. "This continued control is reflected in the pattern of salary increase budgets this year compared with last year's projections." (See Table 1.) For all industries as a group and for all three employee groups (nonexempt, exempt and executive) 2006 salary budgets are virtually identical to last year's projections.
Pay increases in diversified financial services and insurance were slightly higher than projected; diversified service was slightly lower.
Estimates for 2007 for all industries and for all employees show salary hikes staying at 3.5 percent with the exception of the executive group, which is projected to move to 3.8 percent. (See Table 2.) This pattern persists in the individual industry sectors with six out of seven projecting higher increases for executives in 2007.
Inflation is projected to be less than median salary budgets in both 2006 and 2007. The Conference Board currently projects a 3.1 percent rise in inflation for 2006 and 3.3 percent for 2007.
Median salary structure adjustments were under 3 percent for the fifth year in a row. (See Table 3.) Salary structure adjustment is the movement, up or down, of pay ranges established by organizations for the hierarchy of jobs.
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Source: 2006-2007 Salary Increase Budgets, The Conference Board
Table 1: SALARY INCREASE BUDGETS, 2006 Estimate vs. 2006 Actual 2006 Estimate 2006 ActualType of Business Number of Companies* Median Number of Companies* MedianALL INDUSTRIESNonexempt 478 3.5% 428 3.5%Exempt 485 3.5 439 3.5Executive 468 3.5 414 3.6COMMERCIAL BANKINGNonexempt 20 3.5 23 3.5Exempt 20 3.5 23 3.5Executive 20 3.5 23 3.5DIVERSIFIED FINANCIAL SERVICESNonexempt 22 3.6 28 3.7 Exempt 23 3.6 29 3.7Executive 21 3.6 28 3.7DIVERSIFIED SERVICESNonexempt 59 3.8 43 3.5 Exempt 60 4.0 44 3.5Executive 60 4.0 43 3.8INSURANCENonexempt 50 3.7 36 3.8Exempt 50 3.6 37 3.9Executive 50 3.7 34 3.8MANUFACTURINGNonexempt 222 3.5 208 3.5Exempt 225 3.5 212 3.5Executive 214 3.5 198 3.7TRADENonexempt 47 3.5 41 3.5Exempt 48 3.5 42 3.5Executive 48 3.6 41 3.5UTILITIESNonexempt 42 3.5 38 3.5Exempt 42 3.5 39 3.5Executive 39 3.5 34 3.5
* Other industry groups are included in totals but not shown separately because of small samples. Table 2: SALARY INCREASE BUDGETS 2006 and 2007Number of Companies: 441 2006 Actual Estimated for 2007 Middle 50% Middle 50% Number of Range Number of RangeType of Business Companies* Median Low High Companies* Median Low HighALL INDUSTRIESNonexempt 428 3.5% 3.3% 4.0% 392 3.5% 3.5% 4.0%Exempt 439 3.5 3.3 4.0 401 3.5 3.5 4.0Executive 414 3.6 3.5 4.0 379 3.8 3.5 4.0COMMERCIAL BANKINGNonexempt 23 3.5 3.0 3.8 21 3.5 3.0 4.0Exempt 23 3.5 3.0 3.8 21 3.5 3.3 4.0Executive 23 3.5 3.0 3.8 21 3.8 3.0 4.0DIVERSIFIED FINANCIAL SERVICESNonexempt 28 3.7 3.5 4.0 27 4.0 3.5 4.1Exempt 29 3.7 3.5 4.0 28 3.9 3.5 4.4Executive 28 3.7 3.5 4.5 27 3.8 3.5 4.5DIVERSIFIED SERVICESNonexempt 43 3.5 3.5 4.0 42 3.6 3.5 4.0Exempt 44 3.5 3.5 4.0 43 3.5 3.5 4.0Executive 43 3.8 3.5 4.0 42 3.7 3.5 4.0INSURANCENonexempt 36 3.8 3.5 4.0 29 3.9 3.5 4.0Exempt 37 3.9 3.6 4.0 30 3.9 3.5 4.0Executive 34 3.8 3.5 4.0 28 4.0 3.5 4.0MANUFACTURINGNonexempt 208 3.5 3.2 4.0 188 3.5 3.5 4.0Exempt 212 3.5 3.3 4.0 191 3.7 3.5 4.0Executive 198 3.7 3.4 4.0 179 3.8 3.5 4.0TRADENonexempt 41 3.5 3.0 3.7 40 3.5 3.0 4.0Exempt 42 3.5 3.0 3.8 41 3.5 3.0 3.9Executive 41 3.5 3.0 4.0 40 3.6 3.1 4.0UTILITIESNonexempt 38 3.5 3.1 3.6 36 3.5 3.5 3.7Exempt 39 3.5 3.3 3.8 37 3.5 3.5 3.8Executive 34 3.5 3.5 4.5 32 3.6 3.5 4.5* Other industry groups are included in totals but not shown separately because of small samples. Data collected April — May 2006. Table 3: SALARY STRUCTURE ADJUSTMENTS 2006 and 2007 Number of Companies: 441 2006 Actual Estimated for 2007 Middle 50% Middle 50% Number of Range Number of RangeType of Business Companies* Median Low High Companies* Median Low HighALL INDUSTRIESNonexempt 377 2.5% 2.0% 3.0% 340 2.7% 2.0% 3.0%Exempt 378 2.5 2.0 3.0 342 2.7 2.0 3.0Executive 311 2.5 2.0 3.0 285 2.5 2.0 3.0COMMERCIAL BANKINGNonexempt 22 2.3 2.0 3.0 21 2.0 2.0 3.0Exempt 22 2.5 2.0 3.1 21 2.0 2.0 3.0Executive 19 2.0 0.0 2.5 18 2.0 1.5 3.0DIVERSIFIED FINANCIAL SERVICESNonexempt 25 2.6 2.0 3.0 23 2.8 2.0 3.0Exempt 26 2.6 2.0 3.5 24 2.7 2.0 3.5Executive 23 2.5 2.0 3.0 21 2.5 2.0 3.0DIVERSIFIED SERVICESNonexempt 36 2.5 1.8 3.0 35 2.5 2.0 3.0Exempt 36 2.8 2.0 3.0 35 2.7 2.0 3.0Executive 31 2.5 0.0 3.0 30 2.3 0.0 3.0INSURANCENonexempt 34 2.7 2.2 3.0 28 2.8 2.5 3.0Exempt 34 2.7 2.4 3.0 28 2.8 2.5 3.0Executive 29 2.7 2.4 3.0 25 2.8 2.5 3.0MANUFACTURINGNonexempt 178 2.5 2.0 3.0 159 2.8 2.0 3.0Exempt 178 2.7 2.0 3.0 158 2.9 2.0 3.0Executive 145 2.6 2.0 3.0 132 2.8 2.0 3.0TRADENonexempt 38 2.5 2.0 2.8 35 2.5 2.0 3.0Exempt 37 2.5 2.0 2.9 35 2.5 2.0 3.0 Executive 31 2.0 0.0 2.7 29 2.5 2.0 3.0UTILITIESNonexempt 32 2.5 2.0 2.7 30 2.5 2.5 3.0Exempt 33 2.5 2.0 2.7 31 2.5 2.5 3.0Executive 22 2.5 2.0 2.7 21 2.5 2.5 2.7* Other industry groups are included in totals but not shown separately because of small samples. Data collected April — May 2006.
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