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Compensation budgets to remain stable for 2011

Few companies anticipate having to take drastic actions such as pay freezes to reduce costs.

By staff Writer | Updated on December 14, 2010

A new survey from Aon Hewitt, the global human resource consulting and outsourcing business of Aon Corp., reveals that compensation budgets are likely to remain intact for 2011. Additionally, few companies anticipate having to take drastic actions such as pay freezes to reduce costs.

Aon Hewitt’s survey of more than 500 employers found that three-quarters of companies expect to reach or exceed business performance goals this year, leading to the stabilization of pay and variable pay budgets in 2011. Most companies (56 percent) made no revisions to their original base salary increase budgets, which are anticipated to be at their highest levels in two years. In 2011, salary increases for salaried exempt workers (those workers for whom overtime rules do not apply) are expected to be 2.8 percent. This is up from 2.4 percent in 2010, and significantly higher than the record-low pay raises workers saw in 2009 (1.8 percent).

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