The Average Annual Salary Increase in Percentages

Written by meryl baer
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The Average Annual Salary Increase in Percentages
As unemployment rises workers realise salary increases may be minimal or nonexistent. (David McNew/Getty Images News/Getty Images)

Employees want to be paid fairly. Raises indicate a company's appreciation of the employee's value to the firm as well as the practical need to keep up with inflation. Different economic climates dictate a company be more lenient or tighter with allocating funds for wage increases. Employees need to know what other companies offer to compare with their raise --- or lack of a raise. Knowledge of percentage increases provides a more accurate measure of comparison than dollar figures.

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Recessionary Times

Ronald Reagan is credited with the famous quote that recession is when your neighbour loses his job; depression is when you lose yours. There are times an employee is happy just to have a job; salary increases are not an integral part of the reason to remain in or leave a position. The period 2007 through 2011 was one of these times. Culpepper, a salary consulting and services firm that conducts yearly salary surveys, found salary dollar raises and salary percentage increases sank to historic lows in 2009; many companies reported salary cuts and salary freezes along with staff reductions.

Salaries Increase as the Economy Improves

Companies discontinued salary freezes and began offering small increases again by 2010. The increases remained well below the average global salary increase of 4 per cent before 2008. Following the onset of the recession in the United States and the 2008 global financial crisis, 37 per cent of companies surveyed instituted salary freezes. Salary freezes decreased by 2011 to just 4 per cent of companies polled. Wage increases worldwide improved from 2.5 per cent in 2010 to 3.14 per cent in 2011. Average salary raises in the United States climbed from 2.38 per cent in 2010 to 2.95 per cent in 2011.

Wage Freezes and Salary Increases

Hewitt Associates, a human resources consulting firm, surveyed 1,450 large companies in 2010 concerning 2010 pay raises and planned 2011 increases. Record low wage increases offered by companies in 2009 averaged just 1.8 per cent. The average increase for salaried exempt workers in 2010 was 2.4 per cent and was projected to increase to 2.9 per cent in 2011. Non-union hourly and union employee raises were expected to average 2.8 per cent in 2011. Almost half -- 49 per cent -- of the companies surveyed initiated wage freezes in 2009. By 2010 the number decreased to 21 per cent of companies surveyed. Only 10 per cent of the companies anticipated beginning or continuing wage freezes in 2011.

Industry Wage Disparities

The Hewitt Associates survey revealed higher wage increases for certain industries and particular jobs. The highest average salary increase of 3.3 per cent was predicted for the accounting, consulting and legal professions in 2011. Increases of 3.2 per cent were forecast for energy, aerospace, pharmaceutical, construction, engineering and real estate jobs. Automotive and forest and paper products industries expected 2.7 per cent increases in 2011. The lowest increase of 2.3 per cent was estimated for positions in education.

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