New Hay Group Study Finds that 2004 Salary Increases For Most Employees Remain Lower Than Historical Average of 4.0%

The Hay Group provides summaries of pay increases and bonus payouts and outlines what employers can do to maximize their compensation investments and retain their top talent.

PHILADELPHIA, September 27, 2004—Median annual merit increases for most employees remain below historical averages in 2004 according to new data released by Hay Group this week. Average 2004 pay raises for blue collar (3.0%), nonexempt (3.5%), and professional/managerial employees (3.5%) remain at 2003 levels, which were lower than previous years’. While median increases for executives (3.5%) are up from 2003, they are still below 2001 levels.

Prior to 2001, the historical average merit increase for all levels was closer to 4.0%. Of the four employee groups listed above, only blue collar workers failed to outpace the Consumer Price Index of 3.0% for the 12 months ending July 31, according the Bureau of Labor Statistics.

“We’re still in a valley,” said Doug Jensen, Hay Group’s head of US Reward Consulting. “The outlook for some industry sectors is better than others. Most companies are allocating their scarce HR dollars across the employment base and attempting to pay-for-performance and make sure their reward programs are aligned with the business.”

These figures are from the new 2004 Hay Compensation Database representing all industries and including over 1,700 organizations and more than three million employees.