Although pay increase budgets are now at 2.8 percent, an increase from the all-time lows of 2.2 percent in 2009, this bump does not seem to come from employers distributing larger pay increases, finds the 39th annual WorldatWork 2012-2013 Salary Budget Survey.
Rather, this increase appears to be coming from respondents reporting frozen salary budgets. In fact, the number of zero percent responses fell from 33 percent in 2009 to 5 percent in 2012.
"There is an inverse relationship between the spike in organizations budgeting zero percent and the overall average salary budget increase," says Alison Avalos, a Certified Compensation Professional and research manager for WorldatWork. "Picture an iceberg thawing and its reflection in the water with the portion of organizations freezing pay increase budgets represented by the portion of the iceberg visible above the water. When pay budget freezes spiked in 2009, overall mean and median salary budget increases plummeted, pulled down by the zero values.
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