Special Update: Salary Budget Survey

Transcription

1 Special Update: Salary Budget Survey January 2004

2 About WorldatWork WorldatWork is the world s leading not-for-profit professional association dedicated to knowledge leadership in compensation, benefits and total rewards. Founded in 1955, WorldatWork focuses on human resources disciplines associated with attracting, retaining and motivating employees. Besides serving as the membership association of the professions, the WorldatWork family of organizations provides education, certification (Certified Compensation Professional CCP, Certified Benefits Professional CBP and Global Remuneration Professional GRP ), publications, knowledge resources, surveys, conferences, research and networking. WorldatWork Society of Certified Professionals and Alliance for Work-Life Progress (AWLP) are part of the WorldatWork family. WorldatWork World Headquarters N. Northsight Blvd. Scottsdale, AZ Copyright 2004, WorldatWork ISBN No portion of this publication may be reproduced in any form without the express written permission of WorldatWork. 1

3 About This Survey This survey brief contains top-level data and information from the October 2003 fielding of the Special Update: Salary Budget Survey. METHODOLOGY In October, surveys were electronically sent to 3,046 WorldatWork members who had participated in the April 2003 Salary Budget Survey. Of this sample, 774 U.S. responses were received, a 25 percent response rate. Demographically, these respondents closely match the WorldatWork membership as a whole, and therefore, this sample can be considered statistically representative of the membership. Of the 280 Canadian surveys sent, 67 responses were received. Canadian responses are summarized starting on page 14, however because of a small n, the data lacks statistical power and possible reliability. Caution should be taken when using this data. summary of findings U.S. Although half the respondents indicated in October that their economic conditions were better than the previous year, organizations are budgeting slightly lower increases than projected in the April fielding of the WorldatWork Salary Budget Survey. Two out of five respondents (40 percent) report either actually making a change or considering a change to the 2004 salary budget plan they reported in April. Almost all of those either considering or making a change for 2004 (about 75 percent of the 40 percent, or 232 organizations out of the total respondent sample) are making a change toward a decrease. Only a small percent are considering an increase. WorldatWork is now reporting lower total salary budget increase figures for 2004, a 0.2 percent decrease in all employee groups. Updated figures project slightly lower increases ranging from 3.4 percent for the non-exempt hourly nonunion and non-exempt salaried group to 3.6 percent for the officer/executive group. Variable pay budget data from October are showing both stability and decrease from the April data, depending on employee group. Projected 2004 variable pay budgets have remained the same since April for the non-exempt hourly nonunion and exempt salaried groups, while decreasing by half a percentage point or less for the non-exempt salaried and officer/executive groups. 2

4 Survey Results U.S. Economic Environment Exactly half (50 percent) of the respondents to the October 2003 year-end update indicated that economic conditions (measured by revenue growth) at their organization in the middle part of the year were better than in A little more than one-quarter of respondents (28 percent) characterized their organization s revenue as the same as 2002, while the remaining quarter (22 percent) believed their revenues were worse than FIGURE 1: How would you characterize your organization s revenues for the 6-month period between May 2003 and October 2003? (n=759) 22% Better than 2002: 50% 50% Same as 2002: 28% Worse than 2002: 22% 28% Changes to Base Salary Budget Plans In late September, WorldatWork posted a Quick Question Web poll asking if organizations have made changes to their salary budget increases projected earlier this summer. More than 50 percent of the respondents indicated a possible change, indicating a need for an update to the annual April-collected Salary Budget Survey. Thirty-three percent of respondents to the year-end update survey reported changes to the 2004 base salary budget plans made earlier in 2003, and seven percent indicated they were unable to answer. Together, these respondents represent 40 percent reporting a possible change to the plans they had in place just six months earlier. FIGURE 2: Are you anticipating any changes to the 2004 base salary budget estimates you made in April of this year? (n=774) 7% 33% Yes: 33% No: 60% Cannot answer at this time: 7% 60% 3

5 Survey Results U.S. Budget changes will affect virtually all employee groups among the 33 percent (n=255) of organizations reporting late-year changes in salary budget plans for As Figure 3 indicates, the most widespread change will be to the exempt salaried group. Ninety-seven percent of organizations making a change report that it will impact this group. Ninety-two percent of organizations making a change to their salary budget plans for 2004 will make a change to the officer/executive group, while 91 percent will make a change to the non-exempt salaried level. The group least impacted by change is the nonexempt hourly nonunion employee group (84 percent). FIGURE 3: If you are making a change, which of the following do you anticipate changing or have you already changed? % 91% 97% 92% 80 Non-exempt Hourly Nonunion: 84% 60 Non-exempt Salaried: 91% 40 Exempt Salaried: 97% Officer/Executive: 92% 20 0 n=222 NHN n=222 NS n=254 ES n=244 O/E Of course, a change in salary budget plans does not have to mean a downward change or a decrease. For the majority in the October study, however, a change did mean a downward adjustment. Approximately 75 percent of organizations making a change expect a decrease in salary budgets in all employee groups. Unlike Figure 3, which showed a variation in the job classification, Figure 4 provides a fairly uniform picture of levels of decrease. FIGURE 4: For those groups that you anticipate a change or have already changed, is the change an increase or a decrease? Officer/Executive 26% 74% Exempt Salaried 25% 75% Decrease Non-exempt Salaried 24% 76% Increase Non-exempt Hourly Nonunion 26% 74%

6 Survey Results U.S. In April 2003, respondents to the Salary Budget Survey reported lower 2003 actual salary increases than actual 2002 increases. Projections for 2004 were slightly higher than those reported for actual 2003 but were still lower than 2002 actual. (See Figure 5.) FIGURE 5: Total Salary Budget Increases April 2003 Data 1 October 2003 Data n Actual Actual Projected Projected Employee Group 3.7% 3.5% 3.6% 3.4% 541 Non-exempt Hourly Nonunion 3.7% 3.4% 3.6% 3.4% 476 Non-exempt Salaried 3.9% 3.6% 3.7% 3.5% 719 Exempt Salaried 4.0% 3.6% 3.8% 3.6% 664 Officer/Executive In October 2003, respondents were again asked to estimate their 2004 base salary increase budget program. Figure 5 also shows new salary increase projections that have been updated with the October survey data. The new projections show lower salary increases in all employee groups, a 0.2 percent decrease across the board. These updated figures are more consistent with 2003 actual increases than previous projections. According to data from the October survey, more than three-quarters of employees in each employee group will receive a base salary increase in (See Figure 6.) Compared to 2003 actual data, these projections represent a decrease of percent, depending on employee group. FIGURE 6: Percentage of Employees Receiving Salary Budget Increases Actual 3 Projected Employee Group 84.5% 77.3% Non-exempt Hourly Nonunion 83.8% 78.3% Non-exempt Salaried 83.4% 79.5% Exempt Salaried 79.4% 78.3% Officers/Executive 1 WorldatWork Salary Budget Survey, p. 8 2 n s derived using October 2003 data for those reporting a change in estimates and May 2003 data for those reporting no change 3 WorldatWork Salary Budget Survey, p. 11 5

7 Survey Results U.S. Variable Pay Variable pay plan figures do not appear to have changed much from mid As Figure 7 indicates, only 14 percent of respondents indicated a change in the October survey to their April 2003 variable pay plans. FIGURE 7: Do you anticipate changes to the 2003 variable pay awards from your original estimate in April 2003? (n=591) 9% 14% Yes: 14% No: 77% Cannot answer at this time: 9% 77% It also appears that there has been few changes to projected 2004 variable pay plans since April In the October survey, only eight percent of respondents reported a change to 2004 variable pay plans. FIGURE 8: Do you anticipate changes to the 2004 variable pay budget from your original estimate in April 2003? (n=590) 13% 8% Yes: 8% No: 79% Cannot answer at this time: 13% 79% 6

8 Survey Results U.S. Respondents to the April 2003 survey projected variable pay budgets for 2004 that would bring them in lower than 2003 actual for the non-exempt hourly nonunion and non-exempt salaried groups, but higher for the exempt salaried and officer/executive groups. April data projected 2004 variable pay budgets ranging from 5.0 percent for the non-exempt hourly nonunion group to 32.3 percent for the officer/executive group. See Figure 9 for details. FIGURE 9: Variable Pay Awards and Budgets April 2003 Data 4 October 2003 Data n 2004 n Budget Award Budget Award Budget Employee Group 5.5% 5.4% 5.0% 4.4% % 237 Non-exempt Hourly Nonunion 6.5% 6.7% 5.9% 6.6% % 232 Non-exempt Salaried 12.6% 11.7% 11.9% 12.3% % 442 Exempt Salaried 32.4% 29.1% 32.3% 29.4% % 426 Officer/Executive Year-end data from the October 2003 survey show that the 2003 award increased for the exempt salaried and officer/executive groups, but decreased for the non-exempt hourly nonunion and non-exempt salaried groups. (See Figure 9.) The October survey shows 2003 variable pay awards fell below the 2003 budget reported in April for all groups except the non-exempt salaried group, which actually received 0.1 percent more than budgeted. Figure 9 shows the updated 2004 variable pay budgets are consistent with April 2003 projections for the non-exempt hourly nonunion and exempt salaried groups. Variable pay budgets for the non-exempt salaried and officer/executive groups decreased by half a percentage point or less. The October 2003 data show 2004 variable pay budgets are higher than 2003 variable pay awards for the non-exempt hourly nonunion and officer/executive groups (range of 0.6 to 2.4 percent depending on group). 4 WorldatWork Salary Budget Survey, p n s derived using October 2003 data for those reporting a change in estimates and May 2003 data for those reporting no change 7

9 U.S. Regional Breakdowns Salary Increase Budgets for 2004 The following tables containing October 2003 data take an in-depth look at the salary increase projections for each employee classification broken out by U.S. region. (Please see page 16 for regional breakdowns.) Non-exempt Hourly General/ Merit Other Total Nonunion Cola Increase Increase Increase East 2.5% % % % 250 Central 2.4% % % % 278 South 2.7% % % % 238 West 2.2% % % % 243 Non-exempt General/ Merit Other Total Salaried Cola Increase Increase Increase East 1.8% % % % 231 Central 2.3% % % % 262 South 2.1% % % % 232 West 1.4% % % % 222 Exempt Salaried General/ Merit Other Total Cola Increase Increase Increase East 2.0% % % % 341 Central 2.0% % % % 373 South 2.3% % % % 326 West 1.6% % % % 329 Officer/Executive General/ Merit Other Total Cola Increase Increase Increase East 2.0% % % % 322 Central 2.0% % % % 350 South 2.8% % % % 300 West 1.5% % % % 310 8

10 U.S. Company Size Breakdowns Salary Increase Budgets for 2004 The following tables containing October 2003 data take an in-depth at the salary increase projections for each employee classification broken out by company size (i.e., number of employees). Non-exempt Hourly General/ Merit Other Total Nonunion Cola Increase Increase Increase < % % % % , % % % % 204 2,500-9, % % % % , % % % % 70 Non-exempt General/ Merit Other Total Salaried Cola Increase Increase Increase < % % % % , % % % % 189 2,500-9, % % % % , % % % % 67 Exempt Salaried General/ Merit Other Total Cola Increase Increase Increase < % % % % , % % % % 272 2,500-9, % % % % , % % % % 89 Officer/Executive General/ Merit Other Total Cola Increase Increase Increase < % % % % , % % % % 251 2,500-9, % % % % , % % % % 84 9

11 U.S. Industry Breakdowns Salary Increase Budgets for 2004 The following tables containing October 2003 data take an in-depth look at the salary increase projections for each employee classification broken out by industries. Non-exempt Hourly General/ Merit Other Total Nonunion Cola Increase Increase Increase Services 2.2% % % % 206 Manufacturing 2.7% % % % 137 Public Admin 1.3% 8 3.0% 16 * * 3.3% 18 Retail * * 3.3% 26 * * 3.3% 28 Trans. Utility 2.8% 8 3.1% % 6 3.5% 39 Wholesale % 15 * * 3.7% 15 Finance 2.3% 6 3.4% % % 75 Non-exempt Salaried General/ Cola Merit Increase Other Increase Total Increase Services 2.2% % % % 149 Manufacturing 2.5% % % % 155 Public Admin 1.4% 7 2.9% 15 * * 3.4% 16 Retail * * 3.5% 11 * * 3.5% 12 Trans. Utility * * 3.1% 35 * * 3.2% 37 Wholesale % 12 * * 3.9% 12 Finance 1.9% 6 3.4% % % 70 Exempt Salaried General/ Cola Merit Increase Other Increase Total Increase Services 2.2% % % % 265 Manufacturing 2.6% % % % 196 Public Admin 1.2% % 22 * * 2.6% 26 Retail * * 3.4% 28 * * 3.5% 29 Trans. Utility * * 3.1% % 7 3.4% 53 Wholesale % 19 * * 3.7% 19 Finance 1.9% 7 3.5% % % 99 Officer/Executive General/ Cola Merit Increase Other Increase Total Increase Services 2.3% % % % 245 Manufacturing 3.1% % % % 171 Public Admin 1.0% % 20 * * 2.6% 23 Retail * * 3.5% 27 * * 3.5% 28 Trans. Utility * * 3.3% 46 * * 3.5% 50 Wholesale % 19 * * 3.6% 19 Finance 2.3% 6 3.6% % % 97 * Fewer than five survey respondents - No data 10

12 U.S. Regional Breakdowns Variable Pay Programs The following tables containing October 2003 data take an in-depth look at the variable pay projections for each employee classification broken out by U.S. regions. (Please see page 16 for regional breakdowns.) Non-exempt Hourly Nonunion 2003 VP Award 2004 VP Budget East 4.8% % 111 Central 4.2% % 123 South 4.7% % 104 West 4.5% % 116 Non-exempt Salaried 2003 VP Award 2004 VP Budget East 5.5% % 109 Central 4.8% % 132 South 6.5% % 117 West 6.5% % 111 Exempt Salaried 2003 VP Award 2004 VP Budget East 11.9% % 219 Central 11.8% % 247 South 12.4% % 211 West 13.1% % 222 Officer/Executive 2003 VP Award 2004 VP Budget East 30.3% % 215 Central 31.1% % 233 South 30.2% % 203 West 32.5% %

13 U.S. INDUSTRY Breakdowns Variable Pay Programs The following tables containing October 2003 data take an in-depth look at the variable pay projections for each employee classification broken out by industries. Non-exempt Hourly Nonunion 2003 VP Award 2004 VP Budget Services 3.8% % 65 Manufacturing 3.4% % 84 Public Admin * * * * Retail 3.2% 8 3.8% 8 Trans. Utility 5.1% % 22 Wholesale 5.6% 7 5.6% 6 Finance 6.7% % 37 Non-exempt Salaried 2003 VP Award 2004 VP Budget Services 8.5% % 58 Manufacturing 4.9% % 86 Public Admin 2.6% 6 * * Retail 3.9% 9 3.4% 8 Trans. Utility 9.0% % 19 Wholesale * * * * Finance 8.4% % 39 Exempt Salaried 2003 VP Award 2004 VP Budget Services 14.0% % 141 Manufacturing 10.2% % 143 Public Admin 2.8% 8 1.8% 7 Retail 14.0% % 19 Trans. Utility 12.3% % 36 Wholesale 12.3% % 10 Finance 14.0% % 63 Officer/Executive 2003 VP Award 2004 VP Budget Services 29.6% % 147 Manufacturing 28.7% % 124 Public Admin 7.1% 9 7.3% 7 Retail 33.0% % 20 Trans. Utility 28.0% % 34 Wholesale 36.2% % 10 Finance 30.8% % 64 * Fewer than five survey respondents 12

14 U.S. COMPANY SIZE Breakdowns Variable Pay Programs The following tables containing October 2003 data take an in-depth look at the variable pay projections for each employee classification broken out by company size (i.e., number of employees). Non-exempt Hourly Nonunion 2003 VP Award 2004 VP Budget < % % , % % 96 2,500-9, % % 52 10, % % 32 Non-exempt Salaried 2003 VP Award 2004 VP Budget < % % , % % 94 2,500-9, % % 64 10, % % 35 Exempt Salaried 2003 VP Award 2004 VP Budget < % % , % % 173 2,500-9, % % , % % 61 Officer/Executive 2003 VP Award 2004 VP Budget < % % , % % 167 2,500-9, % % , % % 59 13

15 Survey Results CANADA Due to a small n, this data lacks statistical power and possible reliability. Caution should be taken when using this data. Salary Budget Increases FIGURE 10: Are you anticipating any changes to the 2004 base salary budget estimates you made in April of this year? (n=67) 8% 25% Yes: 25% No: 67% Cannot answer at this time: 8% 67% FIGURE 11: Total Salary Budget Increases April 2003 Data 6 October 2003 Data n Actual Actual Projected Projected Employee Group 3.2% 3.2% 3.6% 3.0% 38 Nonmanagement Hourly Nonunion 3.5% 3.5% 3.6% 3.4% 63 Nonmanagement Salaried 3.6% 3.5% 3.6% 3.4% 62 Management Salaried 3.8% 4.0% 3.9% 3.8% 60 Officer/Executive 6 WorldatWork Salary Budget Survey, p

16 Survey Results CANADA FIGURE 12: Percentage of Employees Receiving Salary Budget Increases Actual 7 Projected Employee Group 84.9% 80.7% Hourly Nonunion 84.7% 80.8% Nonmanagement Salaried 85.6% 80.5% Management Salaried 79.4% 81.9% Officers/Executive Variable Pay FIGURE 13: Do you anticipate changes to the variable pay budget from your original estimate in April 2003? 2003 Budget 2004 Budget Yes, changing variable pay plans 15% 9 7% 4 No, not changing variable pay plans 78% 45 80% 47 Cannot answer at this time 7% 4 13% 8 7 WorldatWork Salary Budget Survey, p

17 Survey Definitions Regions Eastern United States: CT, DE, ME, MD, MA, NH, NJ, NY, PA, RI, VT, VA, DC, WV Central United States: IL, IN, IA, KS, KY, MI, MO, NE, ND, OH, SD, WI Southern United States: AL, AR, FL, GA, LA, MS, NC, OK, SC, TH, TX Western United States: AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY Classifications Non-exempt Hourly Nonunion Hourly nonunion employees covered by the Fair Labor Standards Act of 1938 (FLSA). Excludes hourly union employees. Non-exempt Salaried Salaried nonunion employees covered by FLSA. Excludes hourly employees, both union and nonunion. Exempt Salaried All other employees, except officers and executives, not subject to the overtime pay provisions of the FLSA. Officer/Executives Top and/or senior management. Typically the chief executive officer through the executive vice or vice president. Variable Pay Programs (VP) Organization-wide Awards: Provided under a formal plan (not discretionary) based on the success of the whole organization (e.g., cash profit sharing excludes retirement plans). Special Individual Recognition Awards: Given by discretion to key contributors: performance related, not for length of service or equity. Group/Team Awards: Provided under a formal plan (not discretionary) for a plant, division, work unit or team results (e.g., gainsharing covers only a segment of organization). Individual Incentive Awards: Provided under a formal plan (not discretionary) for employee performance in designated jobs. 16

18 ISBN WorldatWork World Headquarters N. Northsight Blvd. Scottsdale, AZ Tel: 480/ Toll free: 877/ Fax: 480/ Toll-free fax: 866/