Merit Salary Increases Average 3.6% Nationally

A nationwide survey of U.S. companies found that merit salary increases are averaging about 3.6% this year, a six-year low and two- to three-tenths of a percentage point below 1994 figures.

The survey, by New York consulting firm Towers Perrin, also found that the actual salary increases for 1995 are at least four-tenths of a percentage point below what companies had planned.

While the findings come as many industries report strong financial results, the data is consistent with a general trend of tight and continuing cost control in all areas of employment, Towers Perrin said.

“Viewed in this context, holding down salary increases is part of a broader effort to streamline and maintain peak efficiency and profitability regardless of economic conditions,” said Susan Rowland, a Towers Perrin principal.

The survey covered 1,383 companies with annual sales ranging from $100 million to more than $10 billion, and included 52 industry groups.

The survey also found that merit salary increases varied across industry groups.

“The aeronautics industry, for example, is experiencing a downturn now, due largely to tightened military spending, and this is affecting the size of merit budgets,” she said. “Conversely, the computer industry is in a growth mode and has set higher budgets this year.”