Salary
increases are expected to accelerate in 2002-03 despite concerns about the
future economic climate, according to a survey by Watson Wyatt.
Watson
Wyatt’s 2002 Salary Budget Survey reveals that companies are budgeting for an
average 4 per cent salary increase for the coming financial year. This is the
same as the actual median increase in the past year, but it is between 0.5 per
cent and 1 per cent above the budgeted increase a year ago for all employee
levels.
"In
many cases, actual increases have broken the budget and there has clearly been
a consistent pressure on salaries over the past year, rather than a fall in
review levels which seemed likely six months ago," said Nick Shasha, a
consultant at Watson Wyatt. "While this higher rate of increase has been
built
into this year’s budgets, it will be interesting to see how many employers will
again be unable to stay within their budgets."
The
Watson Wyatt survey, which included responses from 73 organisations with on
average more than 3,000 employees, reveals that the company’s performance was
the most
important
factor influencing base pay increases (cited by around 40 per cent of
respondents), followed by individual performance (about 30 per cent), market
data (25 per cent) and the cost of living (10 per cent.
