Frozen salaries will be loosening up in 2010, said compensation experts Hewitt Associates.
Frozen and reduced salaries are so 2009. Raises and promotions should be back at work in 2010, according to a survey by Hewitt Associates.
Eighty-three percent of companies surveyed said they will be giving raises in 2010, according to a Wall Street Journal article on the Hewitt survey. The size of the raises, however, will be 2.5 percent for most workers. Executives (2.4 percent) and union workers (2.3 percent) aren’t faring much better.
Only 17 percent of companies said they may have to consider freezing or decreasing salaries next year, said Hewitt Associates in a prepared statement. Compare that to 2009, when 48 percent of companies had to keep salaries at bay during the recession.
“It’s just supply and demand,” (said Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School of Business). One other variable to consider, adds Mr. Cappelli, is inflation. “If it stays really low, wage increases will stay really low. If it rises, so will nominal wage increases,” he says. Another survey, from Watson Wyatt Worldwide Inc. of Arlington, Va., indicates employers expect to give merit increases in 2010 averaging 2.8%. Polled in October, respondents include 201 mostly large U.S. companies; 54% said they plan to end salary freezes in the next six months.
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