Economy to Keep Salary Increases in Check

New York, NY, July 14, 2010--The weak economy will hold down salary increases this year, but the outlook for next year is slightly better, according to a survey by the Conference Board.

The Conference Board said the median budget for salary increases -- meaning the percentage of payroll that companies set aside for raises -- stands at 2.5% for the second straight year in 2010.

But the figure is expected to increase modestly to 3% in 2011, according a survey of over 300 companies the group conducted in April.

"This less-than-robust increase is an indication that the economic recovery has not yet picked up enough strength to significantly raise salary budgets to a level consistent with a healthy economy," Christopher Woock, a human capital researcher at The Conference Board, said in a press release.

While the economy has shown some signs of improvement from a deep downturn, the outlook remains uncertain and many employers are reluctant to ramp up hiring, the survey indicated.

But the news is not all grim. The weak economy is expected to keep consumer prices in check, which could boost the purchasing power of even a small salary increase.