2006 National Average Salary Increases Expected to Be 3.7 Percent.

NEEDHAM, Mass. -- Salary.com's 2005/2006 National Salary Budget Survey Indicates Overall Salary Increases to Remain Flat in 2006, While 35 Percent of Human Resource Managers Anticipate Higher Salary Increase Budgets This Year

This year's National Salary Budget Survey from the compensation

data and solutions experts at Salary.com shows that 2006 salaries are expected to rise at the same rate as last year. The survey shows total pay raises at 3.7 percent nationally, matching reported increases for 2005. Additionally, 35 percent of human resource managers reported that their 2006 budget for salary increases will be larger than 2005, while 9 percent anticipate a lower budget, and 55 percent reported no change.

The survey, conducted between August 2005 and October 2005, consists of nearly 530 responses from human resource professionals, segmented by executive, manager, exempt and non-exempt job levels across all industries, company sizes and geographies.

Joe Kilmartin, director of Salary.com surveys, explains the goals of the National Salary Budget Survey: "Our results are meant to provide human resource professionals with a 2006 benchmark for salary increases in their specific industry, geography and company size. From an employee retention and recruiting perspective, this is important data to consider when salary planning for the New Year."

To download a full copy of the survey results, log onto http://research.salary.com.

Expectations for 2006 salary increases are categorized in the survey by the three components of a total pay raise: general increase (COLA), an across-the-board wage and salary increase designed to bring pay in line with increases in the cost of living; merit increase, an adjustment to an individual's base pay rate based on performance; and equity/market adjustment, the percentage increase to organization, group or individual pay that is necessary to adjust it to the estimated market level.

Nationally, the 2005/2006 National Salary Budget Survey shows general increase (COLA) adjustments are expected to be between 1.0 percent and 1.2 percent of overall pay, depending on job level. This is slightly down from 2005, where general increase adjustments ranged from 1.0 percent to 1.4 percent of overall pay. However, merit increases show a slight rise in 2006, at 3.3 percent to 3.5 percent of overall pay, depending on job level. This is up from 3.2 percent to 3.4 percent in 2005. The survey also shows a downward trend in equity/market adjustment salary increases, which are expected to range from 0.8 percent to 0.9 percent in 2006, down from 0.9 percent to 1.0 percent in 2005.

Some other notable trends that emerged from this year's survey include:

--Non-promotional salary increases were prevalent in 2005 with 75 percent of respondents indicating that they received a raise without receiving a promotion.

--The majority of respondents at 80 percent received their pay increases at a focal date, while 20 percent received their increase at an anniversary date.

--While the overall manufacturing sector is projecting roughly the same increases as in 2005, increases in the wood, paper, and petroleum-manufacturing sector are expected to be 0.5 percent to 1.0 percent higher than 2005 levels.

--Increases for the middle southeast and the lower southeast sub-regions are projected to be slightly higher than in 2005, but the impact of the year's hurricanes may affect these projections.

--The New York-New Jersey sub-region is projecting increases for non-exempt workers to be nearly 1.0 percent lower than last year, while projected increases for executives, managers and other exempt, salaried employees are expected to remain steady over 2005.

Survey Methodology

The 2005/2006 National Salary Budget Survey was conducted between August and October 2005. A total of 528 organizations participated in the survey, ranging in size from fewer than 100 full-time employees to more than 200,000 employees.

Data was collected via an online survey questionnaire that was emailed to potential participants. The data was reviewed by Salary.com's compensation professionals for consistency and accuracy, and invalid data was excluded.

All submissions were aggregated by organizations of similar scopes before the results were calculated. Each numerical result reported in this document is based on data submitted by at least five (and often many more) separate organizations.

About Salary.com, Inc.

Salary.com is a leading provider of compensation solutions providing data, applications, and services to enterprises, small businesses and individuals. Salary.com's personal tools are used and trusted by millions. Salary.com's enterprise software helps companies manage their compensation expenditures with real-time, decision-ready data and analytical tools.

Salary.com benchmark surveys cover a large number of functionally related jobs crossing multiple industries, geographic locations and organization size. Salary.com surveys are as comprehensive as any survey currently available, and are easier for participants. Backed by a team of Certified Compensation Professionals, Salary.com is your partner in compensation.