Merit Budgets Continue to Plummet

Just released results from the WorldatWork Salary Budget Survey Special Update reveal that merit budgets continue to plummet, and that Seattle-area budgets are down more than the nation as a whole.

Overall, results from the Special Update (data was collected in early December) show the average merit budget dropping to 3.1% from the 3.9% projected for 2009 when the survey was originally done in the spring of 2008.

Back here in the Pacific Northwest where we hail from, budgets have dropped even lower, to 2.8% in both Seattle and Portland, tied for the lowest large metro area merit budgets in the country.

Approximately 1 in 6 employers reported a 0% salary increase budget for 2009, a dramatic increase over recent years.

Merit budgets are back to historic low levels, last seen early in the decade, after the stock market collapse starting in 2000, and 2001 recession.

We at AHRS expect salary increase budgets to continue to drop from current levels in early 2009, although the pace of the decrease should slow, barring new unforeseen major economic events yet to unfold.