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Salaries expected to modestly increase in 2011

Increases in U.S. salaries remain historically low, but projections for 2011 show a modest increase, according to The Conference Board annual salary increase budgets survey report.

For the second consecutive year, the median salary increase budget is 2.5 percent. Projections for 2011 show a modest increase to 3 percent. The lowest median salary increase budget forecast for 2011 is in the transportation industry—2.25 percent for exempt employees and executives. The insurance industry also is below the 3-percent median overall forecast for non-exempt salaried, exempt, and executives, while the banking sector reported the lowest projected 2011 increase for non-exempt, hourly employees. Across industries, the 2011 forecast for salary increase budgets showed little variation, with no employee group in any industry projected to exceed the overall median of 3 percent.

Pay for performance continues to be the common approach for the allocation of salary increase budgets, as companies remain focused on higher-performing employees and growth businesses. While most companies have not budgeted general increases, overall merit increase percentages for both 2010 actual and 2011 projected budgets mirror the trend of those of total increases.

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