Salary increases have been outpaced by the rate of inflation for the first time since 1980, according to a recent survey from WorldatWork.
The company's 2011-2010 Salary Budget Survey found that the economic recession had a large impact on salary planning budgets. High unemployment rates may have also influenced budgetary decisions for many companies looking to take on, or retain employees in a floundering economy, according to the source.
Many employees are currently faced with dilemma of paying rising costs for products and services while their salary remains stagnant. However, salary rates may not bounce back until unemployment rates make significant declines, the source points out.
"Successful organizations will not pay more than necessary for any expenditure, and with low risk of losing employees to other organizations, higher increases are not justified at this time," Don Lindner of WorldatWork explained. "This also explains why hardly any companies are making up for past pay freezes in this year’s budget."
Companies looking to add incentives to top-performing staff members may want to bulk up on their worksite benefits. Voluntary employee benefits may be particularly useful for businesses that do not want to increase overhead.
