Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

More raises, smaller pay increases in 2010

By Blake Ellis, contributing writer


NEW YORK (CNNMoney.com) -- The good news is that you're more likely to get a raise next year. But the bad news is that the boost may not be as big as you'd like.

An estimated 14% of employers will freeze salaries across the board in 2010, down from 30% in 2009, according to a survey released Monday by consulting and outsourcing firm Mercer.

Of the organizations that plan to give raises next year, the average base pay increase is projected to be a paltry 2.7%, down from 3.2% in 2009, and even lower than what was predicted earlier this year. In April, a Mercer survey projected pay raises in 2010 to be 2.9%.

But more employers offering pay increases is a good sign for the job market overall, according to Mercer.

"This is still positive news given the fewer firm-wide pay freezes and staff reductions planned now compared to this time last year," Loree Griffith, a principal with Mercer's rewards consulting business, said in a statement.

As employers prepare for an economic recovery, they are focusing on retaining the talent they already have, Mercer said.

"Recognition programs, career development, training opportunities and creative communication campaigns -- efforts that help keep employees engaged and motivated -- along with incentive pay strategies will give companies a competitive edge as business begins to improve," said Griffith.

Increases by industry. The best raises will be in the consumer goods and high-tech industries, where employers are predicted to increase pay 3%.

The smallest raises will be in the education industry, where pay is projected to increase less than the average rate, with a predicted base pay bump of just 2.2%. The survey projects a 2.4% pay raise in the health and medical insurance sector.

Less than 5% of consumer goods and insurance firms are predicted to have pay freezes next year, while 20% of durable goods manufacturers and 18% of services firms will continue to freeze pay, the survey showed.

Mercer's 2009/2010 US Compensation Planning Survey Update was conducted in November and includes responses from more than 350 mid-size and large organizations in the United States.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.90%4.01%
15 yr fixed3.01%3.13%
5/1 ARM3.19%3.26%
30 yr refi3.98%4.12%
15 yr refi3.08%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,689.86 -56.12 -0.32%
Nasdaq 5,128.28 -0.50 -0.01%
S&P 500 2,103.84 -4.79 -0.23%
Treasuries 2.20 -0.06 -2.78%
Data as of 2:38pm ET
Company Price Change % Change
Bank of America Corp... 17.88 -0.25 -1.38%
Micron Technology In... 18.51 -1.39 -6.98%
Facebook Inc 94.01 -1.20 -1.26%
Apple Inc 121.30 -1.07 -0.87%
Frontier Communicati... 4.72 0.09 1.94%
Data as of Jul 31
Sponsors

Sections

Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More