Lower Unemployment but Smaller Raises Seen for D.C. Area

By V. Dion Haynes
Washington Post Staff Writer
Wednesday, September 2, 2009

Washington area employees can expect lower raises, fewer signing bonuses and less premium pay for security clearances this year, but at least their jobs may be safer than elsewhere in the country.

That's the picture emerging from a survey to be released Wednesday of 300 employers in the region, along with the latest government unemployment data.

For the first time in the past five years, Washington area employers as a whole are decreasing the amount set aside for raises -- to a median of 3.5 percent this year, compared with 4 percent the previous four years. The figures come from the 30th annual compensation survey prepared by the Human Resource Association of the National Capital Area, based on data gathered in February from employers at financial services companies, government agencies, contracting firms, hospitals, hotels and nonprofit associations.

And, according to figures Tuesday from the Bureau of Labor Statistics, the jobless rate in the region decreased to 6.2 percent in July from 6.5 percent in June, suggesting that Washington has taken its hits but is still in much better shape than most of the nation, where the non-seasonally-adjusted unemployment rate is 9.7 percent.

Both reports paint a nuanced picture of the region. The latest raises in Washington, while lower, are above the 3 percent that employers nationwide projected for 2010 in a Conference Board survey released Tuesday. Still, the trend in parts of the region's private sector has been to slash jobs and offer generous raises and bonuses to a smaller group of workers who are considered the highest performers, and in the public sector to cut wages through furloughs.

And that, according to some experts, portends a less robust recovery. The stingy raises mean many workers will have less discretionary income to spend on the goods and services that could spur hiring and the creation of new jobs.

"More employers are deciding they may freeze or give lower raises. That translates into fewer people getting raises," said Cara Carter, chairwoman of the human resources association's compensation survey.

"With increased pension costs [for some government contractors] and a decrease in defense spending, there could still be rougher times ahead and more modest salary increases in the future," she added.

Widespread hiring freezes lessened the need for signing bonuses. Last year, 34 percent of employers surveyed said they offered them, compared with 41 percent the year before.

Many employers are focusing their limited resources on employees in the most crucial jobs. For instance, in a compilation of 10 jobs widely held at typical companies and organizations, database administrators ranked highest in the size of their raises -- 9.7 percent. Marketing managers ranked No. 2, with 6.7 percent, a reflection of companies' efforts to reposition themselves in the new economy, experts said.

By contrast, executive secretaries received an average raise of 2.1 percent and recruiters even less -- 1 percent -- reflecting a diminished role in light of hiring freezes.

"Overall, there's less money for raises and bonuses, forcing organizations to be more selective in who gets them," said Cynthia Ward, president of the human resources association. "This is really a time to perform. This is your time to shine at work."

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