Conference Board Says Pay Raises to Average 3.5% This Year

Annual pay raises should average only 3.5 percent this year and are expected to remain at approximately the same level through 2007, according to projections released by The Conference Board.

This marks the fourth year in a row that annual salary increases will be less than 4 percent as employers try to keep a tight rein on their budgets. And Conference Board compensation analysts project that annual pay raises for 2007 in all industries and for all three employee categories (non-exempt, exempt and executives) will continue to hover around 3.5 percent. Pay raises for executives will average slightly higher than those of the other groups, at 3.8 percent, the salary survey revealed.

“Moderate inflation has allowed employers to continue to keep tight control of their payroll costs,” said Charles Peck, a compensation specialist for The Conference Board, in a prepared statement. “This continued control is reflected in the pattern of salary increase budgets this year compared with last year’s projections.”