Salaries Up 5% This Year; 5.1% Expected in ’92

Executives, salaried workers and non-union hourly employees got average base raises of 5% this year and can expect a little more in 1992, according to a survey Friday.

The findings indicate that the recession did not stop employers from keeping raises on pace with or slightly ahead of inflation, said officials at Hewitt Associates, a compensation consulting firm.

“People are being reasonably optimistic about the economy,” said Hewitt consultant Don Hay. “Rather than make a significant adjustment, they’re kind of steering the course.”

Next year’s salaries are expected to increase about 5.1%.

Robert J. LaLonde, a professor at the University of Chicago Business School, said the increases are about what he expected in the current climate.

“Salaries themselves are not extremely sensitive to recession,” he said. “Salaries have been going up over the last 10 years for well-educated people. It would be very surprising to see this group’s salary fall.”

He put the inflation rate this year at 4% to 5%.

The salary increases for 1990 break down to an average of 5.3% for executives, 5% for salaried employees exempt from federal overtime laws, and 4.9% for those not exempt from overtime.

Real estate firms topped the list at 6.2%, though only six companies responded. Pharmaceutical and personal product companies gave average raises of 6%, while computer software companies gave 5.9% hikes.

The lowest pay increases came in government and in the textile and apparel industries, at 2.9% and 3.1%, respectively.

Those planning on the highest pay increases next year include accounting, consulting and law firms and medical equipment companies.

Mining, metals, building materials and forest and paper products companies are planning to give the smallest raises.

“It’s really a function of the times,” Hay said. “Those businesses that are doing more profitably are being more generous when it comes to salaries.”

Hewitt sent the questionnaire to more than 5,000 companies, 1,708 of whom responded. About half the respondents have 1,000 to 5,000 employees, and 62% reported annual revenue of $150 million to $5 billion.

The survey showed more companies are offering extra pay through arrangements that reward workers based on performance.

It found 51% of companies offered such programs this year, up from 47% last year.

Companies in eight western states reported salary raises slightly above the national average, though Hay said he didn’t know why. More than half of those firms are based in California, and many are computer software companies.

The Midwest, East and South held close to the national average, Hay said.