More bad news: Pay raises may be lower in '09


August 17, 2008|By HANAH CHO

If you think your wallet is shrinking now because you're paying more for gas, food and other everyday essentials, consider this new disappointing item: Base pay raises are expected to rise slower next year.

A new survey has found that employers plan to offer an average pay increase of 3.7 percent in 2009, compared with 3.8 percent this year.

This news comes as the government said last week that the cost of living is rising at its fastest rate in 17 years.

Just as we're feeling the financial squeeze, companies in all industries are tightening their budgets, too, says consulting firm Mercer, which conducted the survey of more than 1,000 employers. (The survey reflects 12 million workers and covered executive, management, professional, office and trades/service employees.)

There is a sliver of good news, though. Your base pay raise will climb to 5.6 percent if you're considered a top performer.

So-called average performers will receive 3.3 percent, while the weakest workers won't even earn 1 percent. (I hear you. These classifications are pretty subjective. But I'm just the messenger here.)

Pay raises also vary across industries.

Mercer says high-performing industries are planning to dole out higher pay hikes. The oil and gas business, for instance, is projecting a 5 percent pay increase next year.

In contrast, the retail industry, which is seeing consumers cutting back on discretionary spending, plans a 3.4 percent increase for workers.

From the mailbag: A month ago, I wrote a column about layoff survivors, lamenting about the swirl of emotions they face in the aftermath.

But I didn't think to consider another group dealing with similar consequences: the managers and human resource executives who deliver the bad news.

Anne, a reader and HR professional in Baltimore, makes this poignant point as she writes that she has had to lay people off in the course of her career.

In one instance, during the dot-com boom, Anne recounts hiring 100 engineers in six months, only to have to let go of almost every person when the company ran out of cash.

"Planning a layoff was brutal. How do you lay off a large group of people in a humane fashion while also attending to the needs of those who remain?" she writes. "My first layoff ended in an emotional breakdown where both he and I cried. ... By the fourth round of layoffs, I was emotionally spent and I found that all I could think about was making sure the details were taking care of. To this day, I am not sure what was worse - being so emotionally vested in each layoff or being so emotionally removed that all I could think about was administrative paperwork."

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