Pay raises for most salaried workers will increase by 3.5 percent this year as employers keep budgets in check, the Conference Board reported on Thursday.
The expected 3.5 percent rise makes this the fourth consecutive year that salaries are growing by less than 4 percent, and the trend is expected to last through 2007.
“Moderate inflation has allowed employers to continue to control payroll costs,” a compensation specialist at the Conference Board, Charles Peck, said in a statement. “This continued control is reflected in the pattern of salary increase budgets this year compared with last year’s projections.”
The board expects inflation to rise by 3.1 percent this year and 3.3 percent in 2007.
Pay raises for employees working in the diversified financial services and insurance industries were higher than projected while pay for those working in diversified services was slightly lower.
The nonprofit research group projected for next year an overall increase in salaries to be the same as this year’s, 3.5 percent. Executives, however, are expected to see a slightly bigger rise of 3.8 percent. Six of seven industry groups said executive pay would rise more steeply than for others.
Median salary structure adjustments, or the raises in pay companies apply to different job categories, rose by less than 3 percent in 2005.