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U.S. businesses plan to increase pay raises and lift hiring freezes

Posted on February 25th, 2011 Read time: 1 minutes

U.S. employers are planning to dole out the largest pay raises since the beginning of the financial crisis, according to several experts' predictions.

The consultancy Towers Watson found that companies expect to offer 3 percent merit increases for 2011, up from the 2.7 percent increases awarded to employees on average in 2010. Before the financial crisis, merit increases averaged 3.5 to 4 percent.

BNA, a specialized news publisher, recently released its Wage Trend Indicator, which rose to 98.00 – up from 97.42 in the fourth quarter. The organization anticipates that wage increases for private-sector workers in coming months will reach 2.0 percent, up from the 1.8 percent increase in private sector wages in 2010, based on Department of Labor data.

Rising wages indicate that businesses are continuing to recover in the wake of the recession. As company coffers expand, HR administration teams will have enough funds to expand hiring of temporary workers through payrolling services.

The Towers Watson survey also found that many businesses are lifting hiring freezes, with 40 percent of companies looking to add professional and technical workers to their payrolls. Fifty-four percent reported having problems attracting critical-skill workers. The contract workforce is a great resource of skilled professionals who can meet specific business needs.  

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