Results from Culpepper’s annual survey of salary budgets reveal that global base salary increase budgets are projected to rise from 1.89 percent in 2009 to 2.88 percent in 2010.

According to the compensation firm's 2009-2010 Salary Budget & Planning Survey, preliminary findings released in August 2009 show that:

• Salary freezes. The number of companies freezing salaries is projected to decline from 37 percent in 2009 to 13 percent in 2010. For comanies with frozen salaries, 23 percent plan to unfreeze them by the end of 2009.

• Salary reductions. 13 percent of companies reported that they cut salaries in the prior 12 months. For companies that reduced salaries, one-third planned to reverse reductions by the end of 2009.

• Average global base salary increases. Global base salary increaes are projected to rise from 1.90 percent in 2009 to 2.88 percent in 2010. Excluding salary freezes, global base salary increases are projected to rise slightly from 3.23 percent in 2009 to 3.25 percent in 2010.

• United States. Base salary increases in the U.S. are projected to rise from 1.66 percent in 2009 to 2.68 percent in 2010. Excluding freezes, salary increases in the U.S. are projected to rise slightly from 3.05 percent in 2009 to 3.08 percent in 2010.

• Canada. Base salary increases in Canada are projected to increase from 1.07 percent in 2009 to 2.39 percent in 2010. Excluding freezes, salary increases in Canada are projected to increase from 2.87 percent in 2009 to 3.01 percent in 2010.

• Europe. On average, base salary increases for countries in the Eurozone are significantly lower than other countries in Europe that have not adopted the euro (€) as their official currency.

• Regions with the lowest salary increases. Base salary increases in Canada, the United States, and the eurozone are lower and less volatile than other regions of the world.

• Regions with the highest salary increases. Base salary increases in South America and Africa are higher and more volatile than other regions of the world.

• Salary range structure increases. Base salary range structure increases are projected to rise from 1.25 percent in 2009 to 1.58 percent in 2010. Excluding freezes, salary range structure increases are projected to decline from 2.81 percent in 2009 to 2.58 percent in 2010.

In August 2008, before the global economic crisis unfolded, average base salary increases exceeded four percent (Figure 1), and only 2 percent of companies were freezing salaries (Figure 2). From late 2008 through mid-2009, the number of companies freezing salaries increased to 37 percent, which drove average base salary increases below 2 percent.

Overall, projections for 2010 have improved significantly compared to 2009. However, a relatively high number of companies plan to freeze salaries in 2010, and average projected base salary increases are still much lower than recent years.





Notes: The data collection time period for each data point is provided in parenthesis. Averages include salary freezes (zeros).



Notes: The data collection time period for each data point is provided in parenthesis.


Salary Freezes
The number of companies freezing salaries across all jobs and locations is projected to decline from 37 percent in 2009 to 12 percent in 2010.

Plans to Unfreeze Salaries:
For companies with frozen salaries, 23 percent plan to unfreeze them by the end of 2009:

• 28 percent plan to unfreeze salaries before the end of 2010.
• 4 percent plan to continue freezing salaries through the end of 2010.
• 45 percent of companies are uncertain when they will unfreeze salaries.

Salary Reductions
Thirteen percent of companies reported that they cut salaries in the prior 12 months.

Plans to Rollback Salary Cuts:
For companies that reduced salaries, one-third plan to reverse reductions
by the end of 2009: