DC Metro Area 2009 Pay Budgets from HRA-NCA

WASHINGTON--(BUSINESS WIRE)--Washington’s traditionally strong job market is showing signs of strain, as more companies are planning to decrease staff in 2009 than at any time in the past four years, a recent survey showed. The 2008 Salary Planning Survey, conducted on behalf of the Human Resources Association of the National Capital Area, includes 206 Washington, DC, area employers, representing a wide cross section of industries, sizes and types. The survey found that 13 percent of reporting organizations plan to decrease staff in 2009, vs. 9 percent, 7 percent, and 5 percent in each of the previous three years. The decreases are expected to take place via a combination of layoffs and attrition.

The survey also found, that across the board, in companies that are planning pay increases, the increases are expected to be higher than last year. Average pay increase budgets for exempt staff in 2009 are expected to increase to 4.3 percent from 4.1 percent in 2008. For non-exempt staff, pay increase budgets for 2009 are projected to average 4.2 percent, the same as in 2008. Fewer companies, however, are planning to increase budgets. Eleven percent of participants reported zero budget increases for 2009, compared with 7 percent in 2008. Accounting for companies that are planning zero budget increases, the overall average pay budget increase is expected to be 3.8 percent for exempt staff and 3.7 percent for non-exempt staff.

Twenty-five percent of participants indicated they plan to offer lower increases than the previous year, compared with 15 percent last year. In addition, 21 percent are planning higher increases than the previous year, compared with 25 percent last year.

Other findings of the survey include:

• Companies are more selective providing variable pay, with median companies expecting to provide variable pay to 50 percent of their exempt staff and 75 percent of their non-exempt staff in 2009, compared with 70 percent of their exempt staff and 81 percent of their non-exempt staff in 2008.
• The median percent of pay awarded as variable pay in 2009 is expected to remain flat when compared with 2008, at 6.0 percent for exempt staff and 4.1 percent for non-exempt staff.
• Companies are budgeting COLA increases for exempt staff of 2.5 percent from 2.6 in 2008 and 2.7 percent from 2.6 percent in 2008 for non-exempt staff.

The HRA-NCA Salary Planning Survey was conducted by AKRON, Inc., a local data and survey firm from September 19 through October 17, 2008. HRA-NCA is a mega-chapter of the Society for Human Resource Management and currently supports nearly 600 members. The survey reports are available for sale and further information can be found at www.hra-nca.org .

Press Notes: Reporters wishing to obtain further information about Washington area compensation, compensation policies and practices, and benefits or to set up interviews with local compensation experts, or need a copy of the 2009 DC Area Compensation and Employment Projection Report or the HRA-NCA Compensation Report should call Dave Sturtevant, VP PR, 703-813-5643 or email [e-mail]