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"Salary Hikes Unchanged from 2003, Conference Board Finds"
"NEW YORK -- A sense of caution prevails in the U.S. business community that has resulted in budgets for salary increases remaining virtually the same as last year, The Conference Board reported Thursday."Although U.S. business continues to rebound from the economic downturn, companies are still paying close attention to cost control," says Charles Peck, The Conference Board's compensation specialist. "This continued caution is reflected in the pattern of 2004 salary increase budgets compared with last year's projections." For all industries as a group, 2004 salary budgets are averaging 3.5% more, almost the same as last year's projections. This was true for all three employee groups: nonexempt, exempt and executive.For all but one of the individual industry groups, 2004 budgets were equal to, or slightly less than projected. The exception was the insurance industry, which had forecast 4% for all employee groups. The actual budgets fell markedly below this (between 3.5% and 3.7%).This year is the second time in 11 years (the first time was last year) that median increases have fallen significantly below 4%. Next year will continue this trend, according to 2005 projections."Fortunately, inflation is remaining below salary increase budgets," Peck adds. The Conference Board projects a 2.2% rise in inflation for 2004 compared with a 3.5% average salary budget for both 2004 and 2005. The 2.7% inflation increase projected for 2005 somewhat narrows the difference.Median salary structure adjustments dropped below the traditional 3% increase for the first time in 2003; 2004 and 2005 continue this pattern. Salary structure adjustment is the movement, up or down, of pay ranges for the hierarchy of jobs established by organizations. "