Survey: Pay Raises Expected to Rebound in 2010

Authored by Mark Hefflinger on July 22, 2009 - 8:32am.

Arlington, Va. - Pay raises for U.S. workers are expected to rebound in 2010, following a year in which many companies slashed raises in the wake of the recession, according to a new survey by consulting firm Watson Wyatt.

Companies are projecting median merit increases of 3.0% for next year, according to a survey of 235 large U.S. employers conducted in May.

Additionally, according to a separate survey, only 10% of companies now say they plan to eliminate pay raises in 2010, compared with 25% this year.

"This has been a very difficult year for both employers and their workers, but there is some good news on the horizon," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt.

"Employers plan to give larger raises next year, and many plan to reinstate previously cut pay raises as planning for an eventual economic recovery continues."