Washington, Feb 10: According to a survey, one in four companies has instituted salary freezes for 2009. And that total may rise to one in three employers by the time 2009 budgets are finalized, the consultancy predicted.
Outsourcing and consulting firm Mercer in a survey released on Monday, Feb 9 said 25 per cent of organisations surveyed said they have already decided not to raise their employees' pay, and another 20 per cent are considering a salary freeze this year.
This year, executives are less likely to get an increase than rank and file employees, Mercer said. The biggest budget decrease in the survey findings is at the executive level, where 77 per cent of the more than 400 respondents plan to decrease their salary budget from their 2008 projections.
“Given lackluster corporate performance and recent pressure from regulators, shareholders and the president, it"s not surprising to see that over the past few months, more than one-third of participants who reported executive salary data went from a 2009 planned base salary increase for their executives to a freeze," said Steve Gross, global leader of Mercer"s broad-based performance and rewards consulting business, in a press release.
"It's not an easy message to communicate to employees, but we think managers will be aided by the unprecedented context of these difficult decisions - including low inflation and high unemployment," said Steve Gross of Mercer.
Those companies that plan on offering raises to their employees will give smaller-than-expected pay increases, Mercer added.
For some of the most troubled companies, even freezing salaries may not be enough to sustain operations. General Motors, racing to meet government conditions to keep $13.4 billion in government loans, will include pay cuts for salaried employees in a restructuring plan to be submitted Feb. 17, Bloomberg reported on Monday, Feb 10 citing people familiar with the plan.
OneIndia News (With inputs from Agencies)