Insurance Industry Pay Increases Running Slightly Above Others

June 23, 2006

Pay increases for most salaried workers will average only 3.5 percent this year and stay at that level through 2007, The Conference Board reports.

Pay increases in insurance were slightly higher than projected; diversified service was slightly lower.

For the fourth consecutive year, salary increases are below four percent as employers keep the lid on budgets, according to the Conference Board.

Actual Increase for 2006- All Industries
Median Low High
Hourly 3.5 3.3 4.0
Salaried 3.5 3.3 4.0
Executive 3.6 3.5 4.0

Estimated Increases for 2007- All Industries
Median Low High
Hourly 3.5 3.5 4.0
Salaried 3.5 3.5 4.0
Executive 3.8 3.5 4.0

Actual Increase for 2006- Insurance Companies
Median Low High
Hourly 3.8 3.5 4.0
Salaried 3.9 3.6 4.0
Executive 3.8 3.5 4.0

Estimated Increases for 2007- Insurance Companies
Median Low High
Hourly 3.9 3.5 4.0
Salaried 3.9 3.5 4.0
Executive 4.0 3.5 4.0

“Moderate inflation has allowed employers to continue to control payroll costs,” says Charles Peck, compensation specialist at The Conference Board. “This continued control is reflected in the pattern of salary increase budgets this year compared with last year’s projections.”

For all industries as a group and for all three employee groups (nonexempt/ hourly, exempt/salaried, and executive) 2006 salary budgets are virtually identical to last year’s projections.

Estimates for 2007 for all industries and for all employees show salary hikes staying at 3.5 percent with the exception of the executive group, which is projected to move to 3.8 percent. For the insurance industry, the 2007 projection for increases come in at 3.9 percent.

This pattern persists in the individual industry sectors with six out of seven projecting higher increases for executives in 2007.

Inflation is projected to be less than median salary budgets in both 2006 and 2007. The Conference Board currently projects a 3.1 percent rise in inflation for 2006 and 3.3 percent for 2007.

Median salary structure adjustments were under 3 percent for the fifth year in a row. Salary structure adjustment is the movement, up or down, of pay ranges established by organizations for the hierarchy of jobs.

Source: the Conference Board

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