Saturday, February 23, 2008

What to expect for the Average Pay Raise in 2008

Everyone wants to know what the average raise is for the year so they can compare their salary increase to the “average”. We all think we are above average, right? So by golly, I better get an above average raise.

Well, what happens if you don’t understand your raise? If you work for a large corporation and you ask your manager, he/she will probably tell you that this is the way HR set it up. The computer calculates your raise based on two things. 1) your performance rating and 2) current pay as compared to the industry standard.

If you are underpaid and get a good rating, then the computer will give you more of a raise. If you are paid to market and get a good rating, you will get an average raise. After all, you are paid to market, already. Why would the computer want you to get ahead?

In case no one has noticed, in the last 20 years there has been a sweeping change in the Human Resources field. At large corporations we are witnessing the building of an HR empire. Human Resource departments have grown as much or more than any other department. And HR has maneuvered a huge power grab by instituting cook book methods to control the hiring, firing and the all important salary.

So what does the computer say for 2008? According to a salary survey of 1000 companies by human resource consulting firms Hewitt and Mercer, the preliminary results show an average pay increase of 3.8 percent for 2008. That number does not mean too much by itself, as it is important to factor in inflation. That will tell you how much buying power you have gained or lost. In other words, are you getting ahead or falling behind?

The consulting firm, Mercer, has provided a listing of global salaries as compared to inflation for several leading countries. In a study of 62 countries, it has been determined that global salaries are expected to rise by an average of 6% in 2008 – 1.9% above inflation. The study included five levels of employees: Executives, Management, Professionals (Technical/Professional), White Collar (Clerical/Technical) and Blue Collar (Operational).

As you might have expected, North America and most Western European countries will experience the lowest salary increases in the world. Whereas, India will enjoy the highest pay increases at nearly 10% over inflation! Now that's a raise....

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