Now that we’ve wrapped up the PREP process, and most of you have received notification of your merit increases or promotions, I wanted to share more information about the background for raises this year. But first a reminder -- salary increases are effective May 24 and will appear in your paycheck on June 13.  If you have been nominated for promotion—congratulations!—your salary notification should have included the official notification of your promotion. 

What determined the amount of funds in our merit and promotions pool?  Each year, the Board of Directors approves the proposed salary increase budget for the company, based in large part on compensation surveys of other government contractors as well as our financial performance.  For the past several years, Abt has experienced above-average business results—bucking the trend for many of our competitors.  FY14 was the first period in a while that sales were lower than anticipated—in large part the result of sequestration, delayed procurement decisions and fewer bids, as well as a hyper-competitive, global market.  In addition, in reviewing salary surveys for 2014, the Board found that the majority of companies we benchmark against had lower salary increase budgets than Abt.  The Board therefore approved a smaller pool that is reflective of the marketplace and deemed to be reasonable by our clients.

For  FY14, Abt Associates’ total budget for salary increases is 3.2% of payroll (inclusive of merit, promotions, and any equity adjustments).  This is 0.6 percentage points less than in FY 13. For those of you who have been at Abt for some years, it’s also worth noting that prior to last year, the budget for salary increases was for merit increases only, and there was no cap on increases for promotions or equity adjustments. 

How did IHD prioritize the approved pool? This year, as every year, we had to make tradeoffs regarding awards. We prioritized promotions and equity adjustments. We then distributed the remainder for merit increases focusing on field staff and US staff in levels 2-5. We have managed this decreased pool as best we can and as fairly as possible, but I certainly understand that many will be disappointed by the relatively low raises received, despite very hard work! Finally, I want to emphasize that Abt Associates remains strong financially and this year's reduced pool is a reflection of the broader market and our clients' expectations.

As always, please contact me or any of our DDVPs, if you have questions,

Diana