NEW YORK (CNN/Money) - With the economy doing fairly well, you may have been expecting a windfall in the way of a raise at work this year. Think again.
A new survey conducted by Mercer Human Resource Consulting found that, on average, employers plan to give out pay increases of 3.3 percent in 2004. That average goes up to 3.4 percent when you exclude companies planning salary freezes for at least part of their workforce.
Fortunately, far fewer companies – just 5 percent -- expect to impose salary freezes this year, down from 12 percent in 2003. The survey found salary freezes are more likely to occur in certain industries, namely: business/information services; computer software/services; education; consulting, legal and accounting services; and utilities.
Annual average pay raises have been under 4 percent since 2002, and the trend is likely to continue through 2005.
The survey found the projected average pay increase for next year is just 3.5 percent, again excluding those companies planning a selective salary freeze.
"Employers are seeing some signs of an improved economy this year, but they're not ready to commit to higher pay increases yet," said Steven E. Gross, leader of Mercer's U.S. compensation consulting practice, in a statement.
The survey, which reflects the responses of nearly 1,600 employers across the United States, also noted that the gap between pay raises and inflation has narrowed. In the 1990s, average pay increases were often about two percentage points above inflation, while today, they are closer to one percentage point higher.
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The narrowing of the margin, according to Mercer, is due both to an oversupply of labor and to greater use of incentive pay such as commissions instead of base pay to reward employees.
But the margin above inflation remains greater for some employees than others. Executives will see the biggest average pay raises this year at 3.7 percent, while nonunion hourly workers will see the smallest at 3.3 percent.
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