Mixed Signals Complicate HR and Compensation Planning

A variety of major compensation and HR practices studies are showing mixed signals and making current and forward HR and compensation planning more difficult than at any time since the last major recession in the early 1980's.

Some recent studies, since as the Manpower Employment Outlook Survey (MOES) indicate that the outlook for the second half is relatively "stable" (an end to recent declines on the hiring front), while others, such as recent studies released by Mercer and Watson Wyatt indicate the deep impact that recent economic events and developments have had on HR and developing compensation plans and practices.

In addition, WorldatWork recently released the preliminary data for its 2009-2010 Salary Budget Survey, and the data is certainly revealing:

• Of the 2.9% merit increase predicted for 2009 (in the fall of 2008), the actual increase is likely to be closer to 1.9% based on the data from the thousands of companies that participated in the most recent (spring 2009) WorldatWork survey (Keep in mind this is down from around 4% that was predicted at this time in 2008 for 2009.
• Early projections for 2010 are in the 2.8% range for merit increases.  This data is certainly subject to revision due to the major swings in economic expectations over the past several months.
• Salary structure increases are predicted to in the vicinity of 1.8% for 2010, after only about 1.5% increases in 2009 (the lowest in memory).

Due to the highly unpredictable nature of the current economic situation, this is the latest and and most valid information available.  Stay tuned for updates as more tangible and recent data becomes available.