New Salary Budget Survey From Kenexa Compensation Projects 3 Percent Pay Increase for U.S. and Canadian Workforces

WAYNE, Pa.--(BUSINESS WIRE)--Kenexa (NYSE: KNXA), a global provider of business solutions for human resources, today reported that salary budgets appear to have stabilized three years after record low numbers. In view of the current economic difficulties and uncertainty, employers are projecting a modest 3 percent increase for salary budgets for all employees, according to the U.S. 2012-2013 National Salary Budget Survey conducted by Kenexa Compensation.

“With increase budgets in North America hovering around the 3 percent mark for two years running, it appears as though we have now achieved a new normal. Budgets such as these will continue to put pressure on organizations to ensure that they are paying competitively and retaining their top talent.”

The projected 3 percent rise in salary budgets matches what companies reported for 2012. This represents an increase from 2009, when salary budget levels fell to a record low 2.5 percent for executives and non-exempt employees and 2.8 for managers and exempt employees.

“Since increase budgets bottomed out in 2009, many organizations have been looking forward to the time when they would get back to normal,” said Zahir Ladhani, head of Kenexa’s Compensation business unit. “With increase budgets in North America hovering around the 3 percent mark for two years running, it appears as though we have now achieved a new normal. Budgets such as these will continue to put pressure on organizations to ensure that they are paying competitively and retaining their top talent.”

Since 2006, Kenexa has surveyed U.S. and Canadian companies on their actual and planned salary budgets and compensation programs. This year, 1,186 U.S. and 176 Canadian organizations, representing a broad range of sizes, industries and geographies, participated in the survey.

Overall salaries are still lagging behind pre-recession levels of 2008, the last time median increases were close to 4 percent for executives, managers, exempt and non-exempt employees.

Salaried workers in certain industries, such as biotechnology and software/networking, received higher-than-average pay increases in 2012. Salaries rose 3.5 percent in the biotechnology industry and 3.1 in the software and networking industry. By contrast, the workforce in education, nonprofit and government organizations and the construction industry experienced only a 2.5 percent salary increase.

The report also shows companies continue to increase the eligibility for variable pay, particularly at the executive level. This allows companies to budget for awards that are earned rather than taking on long-term commitments to compensate employees at a specific, predetermined incremental level. Research by Kenexa’s Compensation business unit supports this finding that companies are remaining conservative in handing out merit increases and benefit funding in favor of performance-based pay.

The survey also revealed that 71 percent of participating companies report that their 2013 salary increase budgets will remain unchanged from 2012 and only 22 percent project larger increase budgets for next year.

For the complete U.S. 2012-2013 National Salary Budget Survey from Kenexa Compensation, contact Alison French at [e-mail].

About Kenexa

Kenexa (NYSE: KNXA) helps drive HR and business outcomes through its unique combination of technology, content and services. Enabling organizations to optimize their workforces since 1987, Kenexa’s integrated talent acquisition and talent management solutions have touched the lives of more than 110 million people. Additional information about Kenexa and its global products and services can be accessed at www.kenexa.com. Follow Kenexa on Twitter: @kenexa

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