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Sibson's Annual Compensation Planning Analysis: 2007-2008
Sibson Consulting's annual analysis of actual and projected trends in salary budgets and structure adjustments provides data for three broad job classifications — executive, exempt and non-exempt — in 11 distinct industry groups — banking and finance, education, health services, information services/telecommunications, insurance, manufacturing, nonprofit, retail, services, transportation and utilities.
Although the increases for 2008 are expected to be modest, organizations can be effective in using the available money to attract and retain good employees and improve performance. One of the keys is how this compensation information is communicated. If all employees think they are going to get the full amount budgeted for salaries, then disappointment rather than motivation is the likely result.
The two tables below summarize the results of the latest analysis. They include projections for 2008 as well as projections and actual increases for 2006 and 2007.
TABLE 1: Average Increases in Salary Budgets for All Industries by Broad Job Classification |
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| 2006 Projected |
2006 Actual |
2007 Projected |
2007 Actual |
2008 Projected |
|
| Executive | 3.8% | 3.8% | 3.8% | 3.9% | 3.9% |
| Exempt | 3.7% | 3.7% | 3.7% | 3.9% | 3.9% |
| Non-Exempt | 3.6% | 3.6% | 3.6% | 3.7% | 3.7% |
TABLE 2: Average Salary Range Adjustments for All Industries by Broad Job Classification |
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| 2006 Projected |
2006 Actual |
2007 Projected |
2007 Actual |
2008 Projected |
|
| Executive | 2.6% | 2.7% | 2.7% | 2.8% | 2.8% |
| Exempt | 2.6% | 2.6% | 2.7% | 2.7% | 2.8% |
| Non-Exempt | 2.6% | 2.6% | 2.7% | 2.6% | 2.7% |
The table below includes projections for 2008 as well as actual increases for 2006 and 2007.
Projections for 2008 salary budgets and range adjustments are similar to the actual 2007 increases for most industries. Modifications to projected levels during the budgeting process typically are based on company-specific performance and/or affordability concerns or overall changes in the markets (either up or down). Despite recent volatility in the markets due to sub-prime lending concerns, we expect increases to remain fairly consistent within projected levels, although there may be a modest decrease in the banking and finance sector.
About the authors:
Jim Kochanski is a Senior Vice President in the Raleigh office of Sibson Consulting. He can be reached at 919.233.6656 or jkochanski@sibson.com
Jason Adwin is a Senior Consultant in the New York office of Sibson Consulting. He can be reached at 212.251.5196 or jadwin@sibson.com