2009 Compensation
Plans Hit Hard by Economic Downturn
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| Table 1: 2009 Budgeted Base Salary Increases | |||
|
Percent of Companies Planning
to Freeze Salaries |
Average Projected |
Average Projected |
|
| All Companies |
11.8% |
3.08% |
3.49% |
| Number of Employees | |||
|
Up to 100 |
24.1% |
2.87% |
3.79% |
|
101 to 500 |
8.5% |
3.27% |
3.58% |
|
501 to 2,500 |
7.4% |
3.15% |
3.40% |
|
2,501 to 10,000 |
9.3% |
3.10% |
3.42% |
|
10,000+ |
9.4% |
2.92% |
3.22% |
| Industry Sector | |||
|
Technology |
12.1% |
3.01% |
3.45% |
|
Life Sciences |
7.3% |
3.43% |
3.70% |
|
Healthcare Services |
12.0% |
2.85% |
3.24% |
| Ownership | |||
|
Public |
12.3% |
2.97% |
3.39% |
|
Private |
11.5% |
3.14% |
3.59% |
|
Non-Profit |
7.9% |
3.06% |
3.33% |
2009 Budgeted Salary Range Structure Increases
Since September, average budgeted salary range structure
increases have dropped by 38% from 2.80 percent to 2.03
percent (Table 2). The percentage of companies not
increasing salary range structures has more than doubled
from 13 percent to 28 percent.
| Table 2: 2009 Budgeted Salary Range Structure Increases | |||
|
Percent of Companies
|
Average Budgeted |
Average Budgeted |
|
| All Companies |
27.7% |
2.03% |
2.88% |
| Number of Employees | |||
|
Up to 100 |
40.5% |
1.91% |
3.22% |
|
101 to 500 |
25.6% |
2.23% |
3.00% |
|
501 to 2,500 |
26.5% |
2.04% |
2.77% |
|
2,501 to 10,000 |
26.3% |
1.97% |
2.68% |
|
10,000+ |
20.7% |
2.02% |
2.54% |
| Industry Sector | |||
|
Technology |
31.2% |
1.86% |
2.70% |
|
Life Sciences |
33.3% |
2.16% |
3.24% |
|
Healthcare Services |
6.7% |
2.29% |
2.46% |
| Ownership | |||
|
Public |
33.6% |
1.86% |
2.81% |
|
Private |
25.7% |
2.09% |
2.82% |
|
Non-Profit |
13.6% |
2.40% |
2.78% |
Delaying Salary Increases
Eighteen percent of companies are taking a wait-and-see
approach with the economy and plan to delay salary increases
from three months to a year (Figure 2).
Twenty-one percent of companies were undecided on whether or
not they will delay salary increases in 2009.

Salary Cuts
The vast majority of companies have not cut salaries and do
not plan to cut salaries in 2009.
Only four percent of companies have cut salaries in response to
the economic downturn (Figure 3).
Six percent of companies were undecided on whether or not they
will cut salaries in 2009.

For companies cutting salaries, the average amount was 10
percent of base salary.
Responses ranged between 2 and 20 percent.
Revise Compensation Budgets Wisely
With a prolonged economic downturn looming, it is critical
for companies to carefully manage their compensation expenses.
Companies that freeze or cut salaries or pay below market rates
will risk losing valuable employees and will struggle to attract
the best new talent. On the other hand, companies that pay too
much will risk damaging their financial health and ability to
hire the employees they need to thrive in difficult market
conditions.
A modest investment in current market data will help you
allocate your compensation dollars wisely and in the right
places. Culpepper Compensation Surveys provide the data
you need to establish competitive and effective compensation
plans. Comprehensive data is provided on base salaries, salary
structures, incentives, allowances, total cash compensation,
equity-based compensation, pay and benefits practices, as well
as job descriptions.
Additional Breakouts / Data Tables
In addition to the
tables and figures above, we provide a more comprehensive report
with data tables showing breakouts by number of employees,
industry sector, and ownership/corporate status. Additional data
is also available on:
The more comprehensive version of this report is available to:
Participants in Impact of Economic Downturn on 2009 Compensation Plans Survey
Subscribers of Culpepper Pay Practices & Policies Surveys
Data Source:
Culpepper Trends Survey
of 630 participating organizations.
Survey Dates: November 19
through December 8, 2008.
Industry Sector of Participating Organizations:
Technology
59%, Life
Science 14%, Healthcare Services 5%, Other 22%
Number of Employees in Participating Organizations:
Up to 100:
22%, 101 to
500: 23%, 501 to 2,500: 26%, 2,5001 to 10,000: 17%, Over 10,000:
12%
Ownership/Corporate Status of Participating
Organizations:
Public 39%, Private 50%, Non-Profit 7%,
Other 4%
Country Location of Participating Organizations:
United States 90%, Canada
4%, Other 6%
Author:
W. Leigh Culpepper,
CCP, GRP, CBP
Copying. If you copy portions of this report into your own publication, please cite your source by including the following:
"Source: Culpepper Trends Surveys, December 2008, www.culpepper.com"
Other Related Reports: and Surveys
2009 Salary Increase Budgets for 2009 and 2010 (September 2009)
2009 Salary Increase Budgets Change Significantly (March 2009)
Strategies to Control Compensation Costs in 2009 (November 2008)
Salary Increase Budgets for 2008 and 2009 (August 2008)
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