Local companies raising salaries by 2.9% to 3.1% in ’11, study shows
In what may count as another hint pointing toward an economic improvement for the island’s private sector, a study released Thursday by the Society of Human Resources Management showed that employers are giving salary hikes of between 2.9 percent and 3.1 percent this year.
While large companies, or those with 500 employees or more, are averaging pay raises of 3.12 percent, smaller companies are granting salary increases of 2.9 percent, said Manuel Bermúdez, manager of Aon Hewitt Caribe Inc., co-sponsor of the SHRM’s Compensation Results study.
“All of the organizations are starting to move toward granting salary increases, which was something that was stopped because of the economic crisis. The 2011 study shows that the great majority of companies are giving raises,” he said.
That is a notable improvement from years past, when companies were either keeping salaries the same or reducing them. The current pay raises are also appropriate given that Puerto Rico’s inflation rate was estimated at about 3.4 percent in July, so the numbers seem to balance out.
The second edition of the survey consisted in polling 25 participating companies in May. The sample included large operations such as V. Suárez & Co., Boston Scientific, Fenwal International Inc., PR Waste Industries Corp., Wal-Mart, Triple-S and FirstBank, as well as smaller players such as Real Legacy Assurance Program, Integration Technologies, Corp. (Intech), L’oreal and Suzuki del Caribe.
The study projects that next year’s salary raises will remain along similar lines, averaging about a 3 percent improvement.
“The market is moving, companies are returning to their practice of giving pay raises,” Bermúdez said.
While most large companies are structured in a way that they will grant pay raises regardless of how they are doing, many smaller ones tend to follow their results to determine how they will compensate employees, he said.
The study uncovered other trends, for example, large companies pay their general managers about 26 percent more than their smaller counterparts, and about 25 percent more to their department heads.
“Large companies are truly moving away from the small companies when it comes to their pay scales,” Bermúdez noted.
Meanwhile, when it comes to the mandatory Christmas bonus, 36 percent of the participating companies grant the minimum required by law. Almost all of the companies offer variable pay to their employees, based on their merits.