When the U.S. Bureau of Labor Statistics released its report this month, it read like the unfavorable prognosis of an ailing patient: the unemployment rate rose to 5 percent as the country experienced the smallest monthly increase of jobs it's seen in four years; inflation became a rising concern as it continues to outpace the growth of employee wages, thereby diminishing income value; and economists became evermore convinced that the economy is headed straight for a recession. Anticipated survival rate: 50-50.

So what does this gloomy forecast have in store for your paycheck in 2008? Though salary trends generally follow the economy, there is a silver lining: despite a pessimistic economic and hiring outlook, employees can reap benefits in the form of training and recruiting initiatives, better work/life conditions, and a relatively favorable climate for retirees and entrepreneurs. Below, a breakdown of what you can expect.

Merit Increase: Base Salary Flat to Neutral

If we're not officially in a recession, most CFO's are behaving as we are and the largest cost item on a company's P&L is labor. For most executives, keeping a tight lid on the wages will get additional scrutiny this year. Salary.com estimates that the average merit increase will be 3.8% in 2008 and that means that negotiating for more than average will be a more difficult albeit not impossible task. In other words, this might not be the best year to ask your boss for a raise unless the company, your division and individual performance truly exceeded expectations. Find out the exact breakdown of your paycheck by selecting your job and clicking on the Paycheck tab of salary results page in the Salary Wizard.

Added Bonus: Don't Count On One

As the fear of a recession settles in during the first half of 2008, companies will hold on to their money, becoming more conservative with bonus pools and payouts. In other words, this might not be the best year to bank on your end of year bonus, as expectations for both will be lower than average. Over the past decade, more and more people have come to rely on their bonuses as a source of income, so this downtrend will have the most impact. You can check out how your bonus and total cash compensation compare to market by clicking on the bonus tab of the salary results page in the Salary Wizard.

Use of Equity: Bonus in Stock vs. Cash

Management may elect to use different financial vehicles to award a bonus vs. cash. That is, you may get your bonus in restricted stock instead of cash. In some cases this stock may vest over a period of time rather than immediately. Doing this helps employers manage cashflow and it can provide upside to employees if the companies' stock increases over time. However, it can have a downward impact on your overall cash position in 2008 if you receive your bonus in stock.

Value of Your Time vs. Cash: Stretch Your Work Flexibility

Technology has made jobs fluid. "What you do is divorced from where you do it," says Coleman. "As long as you have [internet and phone] access, you're good to go." Companies have therefore become better able to accommodate employees who wish to work from home a few days a week or adopt flexible hours in order to take care of personal and family responsibilities (particularly child and elder care) during traditional work hours. Not only does this benefit the employee, who as a result also experiences a reduced commute, but the employer as well. Some companies, such as IBM, offer their staff the option of working from home in exchange for giving up an office completely. This contributes to reduced overhead and overall corporation cost savings. On the flip side, companies will face a new set of hurdles as they discover that managing a remote workforce is not a trivial matter. Nonetheless, as a greater number of employers begin to offer work/life benefits, it will place pressure on other employers to follow suit, making this a viable option to explore.

1 | 2 | Next Page >