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CAREER
Salary Outlook: Ahead of Inflation

The early word on raises for 2005 is that you can expect a pay hike that will keep you ahead of inflation. But raises will remain in the 3% to 4% range, so if inflation ticks up, you'll end up with smaller real wage gains than in previous years. "Companies continue to be cautious," says compensation specialist Charles Peck of the Conference Board. "There's an ongoing concern about cost control, and they are determined to keep a lid on salary increases."

Although the job market has picked up, employers believe there's still enough slack in the labor force for them to find the talent they need without offering big salary increases, says Todd Manas of the human resources division of Mellon Financial. Manas says a few companies are giving merit raises that combine cash with time off. Instead of a 4% salary increase, for instance, an employee might get a 2% pay hike plus an extra week of vacation. "It's a way for companies to conserve capital and make employees happy at the same time," says Manas.

If you're changing jobs and find that prospective employers balk at negotiating your salary, switch tactics. Ask instead for an early salary review, extra time off with pay, reimbursement for relocation costs or a flexible work schedule.

But keep in mind that in a survey of its members, the Society for Human Resource Management found that personnel directors said they don't have as much flexibility as job seekers think they do when it comes to offering more generous bonuses or benefits.