Negotiating for a Pay Raise in 2012? Good Luck!

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October 20, 2011; Source: The Wall Street Journal | The economy isn’t looking too spiffy right now. The official unemployment rate stubbornly lingers at 9 percent or above, and most nonprofit budgets are getting whacked by a cascade of government budget cuts and shortfalls in charitable and philanthropic contributions.

What does that portend for nonprofit employee pay raises in 2012?

There are probably many state associations and private consultants doing wage surveys at this very moment to answer that question, but the indications of pay raise prospects from outside the nonprofit sector don’t look too encouraging:

  • A private firm, Buck Consultants, surveyed 280 employers, presumably for-profit, and predicted that “workers can expect modest pay raises, averaging 2.8% next year compared to 2.7% in 2011 and 2.9% in 2010.”.
  • Maybe a bit closer to the nonprofit sector, the salary prospects of doctors will probably increase 2.5 percent in 2012 compared to 2.7 percent in 2011, according to a survey conducted by the Hay Group. Hospital-based doctors can expect 2.5 percent increases, primary care hospital doctors 2.9 percent, and doctors in group practices 4.5 percent increases.
  • If nonprofit employees’ salaries were treated like the retirement payouts to federal civil service retirees, they would be in line for a 3.6 percent cost-of-living adjustment (COLA) in 2012.  Sounds good, except that this is be the first COLA for federal retirees since 2008. The COLA increase will also cover Social Security recipients.
  • Federal employees still working, however, won’t get a COLA increase. In fact, federal employees (civilian, not military) have already been on a pay freeze for the past two years, and if some members of Congress, such as Republican members of the House Oversight and Government Reform Committee (chaired by Darrell Issa, R-CA) get their way, the freeze would be extended another three years. In a separate action, Senators Joe Lieberman (I-CT) and Susan Collins (R-ME) suggested extending the pay freeze for at least another year.

National salary surveys sometimes seem dissonant with respect to what local areas are reporting. For example, a wage survey for the Colorado Springs area found employers predicting a 2 percent salary rise in 2012, which The Gazette said was “the lowest forecasted wage increase in the…33-year history” of the wage survey conducted annually by the Mountain States Employers Council. The Colorado Springs 2 percent increase looks positively robust compared to the predicted 1.7 average raise for the Pueblo area and the 1.1 percent for the rural Western Slope.

What do you see happening to nonprofit wages in 2012? We’d like to hear from you.—Rick Cohen