Survey of Mid-Atlantic Technology Companies Reveals Reduction in Salary Increase Budgets in a Weakened Economy

McLean, VA – February 9, 2009 – In response to the continuing deterioration in regional economic conditions, KnowledgeBank, Inc. recently conducted a "pulse" survey to capture changes in projected 2009 salary increase budgets reflected in its 2008 - 2009 Total Compensation Survey of Mid-Atlantic Technology Companies. KnowledgeBank invited 2008-2009 survey participants, as well as prior years' participants, to submit data for the pulse survey.

Overall projected salary increase budgets for 2008-2009 survey participants were reduced from 4.5% reported in August/September 2008 to 2.8% reported in January 2009. Including prior years survey participants, salary increase budgets trended similarly and were reduced from 4.0% to 2.5%.

The revised 2.5% projected salary increase budgets are dramatically lower than the last eight years' average 4.6% budgets as reported in the Total Compensation Survey of Mid-Atlantic Technology Companies. Nearly 30% of the 2008-2009 Survey Participants participated in the January 2009 "pulse" survey.

Key Findings

• Six out of every ten companies plan on reducing their 2009 salary increases.
• 32% of the companies that reported no change in their revised 2009 projected salary increases already were projecting 0% increases.
• 40% of the companies that reduced their 2009 projected salary increases reduced them to a projected 0%.
• 37% of all companies that participated in the "pulse" survey now are projecting no salary increases for 2009.
• While not a survey question, a few companies indicated that they were reducing salaries by approximately 10%.

Bobbie Kilberg, President and Chief Executive Officer of the Northern Virginia Technology Council, a key sponsor of the Total Compensation Survey of Mid-Atlantic Technology Companies said, "This is clearly the most difficult economy that we have faced, both locally and nationally, for a very long time. The technology community is struggling with the same retrenchment issues that are affecting companies in the broader economy. I am optimistic that technology companies focused on both business-to-business and business-to-government solutions will help turn around job losses and salary reductions as we move into the latter part of this year and into 2010."

Steve Rosenthal, KnowledgeBank's Vice President and Compensation Practice Leader said, "The results of the 2009 pulse survey clearly demonstrate that many technology companies in the Mid-Atlantic region are reducing their salary increase budgets to historically record low amounts. Companies will need to develop creative solutions to motivate and reward their employees in these difficult times."

About the KnowledgeBank, Inc. Total Compensation Survey

Conducted annually for the past 18 years, the KnowledgeBank, Inc. Total Compensation Survey for Mid-Atlantic Technology Companies provides a comprehensive summary and analysis of total compensation, benefits and human capital practices data for primarily small to medium sized technology companies throughout the Mi-Atlantic region.

The survey is co-sponsored as a member service by regional technology councils and other membership-based organizations that serve the technology sector throughout the Mid-Atlantic region. A copy of the summary report is available for purchase to non-participants at www.knowledgebank.us.com.

Included in the 2008-2009 report is an article written by Mark Frantz, General Partner with RedShift Ventures, an Arlington, VA based early stage venture capital firm, who discusses the outlook for the Mid-Atlantic technology sector in 2009.

About KnowledgeBank
KnowledgeBank, Inc. of McLean, VA is an award winning provider of human capital management, organizational effectiveness, outsourcing and consulting services to the commercial, nonprofit and government sectors. The company provides services in every vertical within the human capital spectrum including compensation and benefits, organization assessment and development, strategic planning, change management, performance management, employee engagement and retention, workforce planning, leadership development and coaching, training, compliance, HR management outsourcing and interim HR leadership. KB was selected by Inc. magazine to its list of fastest growing companies in America in 2007 and 2008, and has been recognized by Washington SmartCEO Magazine as one of the fastest growing companies in the Greater Washington region for the past three years.