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Melissa Sharp Murdock

WorldatWork: Year-Over-Year Salary Budgets Drop in Every Country Surveyed Except United States

July 9, 2013 — Scottsdale, Ariz. — Year-over-year salary budgets declined in every country surveyed except the U.S., according to the 40th annual "WorldatWork 2013-2014 Salary Budget Survey." While the U.S. holds steady, other countries appear to be stepping back (see chart below).

  Actual 2012 Actual 2013 Projected 2014
India 11.2% 10.5% 10.9%
China 9.1% 8.2% 8.5%
Brazil 7.7% 6.8% 7.2%
Singapore 4.3% 4.2% 4.3%
Australia 4.0% 3.7% 3.8%
UK 3.1% 2.9% 3.0%
Netherlands 3.1% 2.8% 2.8%
Canada 3.0% 2.9% 3.1%
France 3.0% 2.7% 2.8%
Germany 3.0% 2.9% 3.0%
United States 2.8% 2.9% 3.1%
Spain 2.8% 2.4% 2.5%
Japan 2.6% 2.4% 2.5%

Source: "WorldatWork 2013-2014 Salary Budget Survey"

"The gradual increases in the U.S. is good short-term news, but falling pay budgets in every other industrialized country isn't great news for the global economy, on which U.S. economic growth is so dependent," explained Kerry Chou, CCP, senior compensation practice leader for WorldatWork.

In addition, although it may appear on the surface that organizations in India are the most generous among the countries WorldatWork surveyed, in reality the 10.5% average wage increase this year is offset by annual inflation approaching 10% (source: Government of India, Ministry of Statistics and Programme Implementation). "This means workers in India are not better off than workers in countries where salary increases are below average but still higher than inflation," added Chou. "Workers in the U.S., for example, are experiencing more buying power since the average 2013 salary budget increase is 2.9%, while the annualized inflation rate, as of April 2013 when survey data was collected, was only 1.1%."

"Salary budgets generally reflect what is going on in the national economy," explained Chou. "A nervous economic recovery creates nervous employers who are hesitant about making significant changes to their salary budgets and other fixed costs but are making an effort to find other ways to reward employees."

How are employers motivating and retaining employees when planned pay increases remain tepid? Survey respondents from U.S. companies are focusing on:

  • Variable Pay. Depending on employee category, 81-91% of eligible U.S. employees received variable pay for 2012. For officers/executives, 94% were eligible for variable pay in 2012, though only 91% were actually paid it.
  • Increased differentiation based on performance. In 2014, high performers can expect a 4.1% average pay increase compared to only 2.7% for middle performers (a 152% difference).

About the Survey:
The "WorldatWork 2013-2014 Salary Budget Survey" is the largest survey of its kind with 5,207 responses from 17 countries representing nearly 15 million employees.

WorldatWork collected survey data in April 2013. Survey respondents are WorldatWork members employed in the HR, compensation and benefits departments of mostly large U.S. companies. All data include 0 percent responses. The full report will be available in early August at www.worldatwork.org/salarybudgetsurvey.

A media briefing will be held via conference call on August 7. An educational Webinar will be held on Aug. 21 for HR and compensation professionals (the Webinar is free for this year's survey participants and subscribers).

Journalists and reporters interested in attending the media briefing and obtaining a copy of the high-level report may contact Marcia Rhodes at marcia.rhodes@worldatwork.org or 480-304-6885. All others, please contact Customer Services at 877-951-9191.

About WorldatWork®

The Total Rewards Association

WorldatWork (www.worldatwork.org) is a nonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards — strategies to attract, motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide comprehensive education, certification, research, advocacy and community, enhancing careers of professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has more than 70,000 members and subscribers worldwide; 80 percent of Fortune 500 companies employ a WorldatWork member. Founded in 1955, WorldatWork is affiliated with more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington, D.C.

WorldatWork: Year-Over-Year Salary Budgets Drop in Every Country Surveyed Except United States