NEW YORK, February 24, 2011 — U.S. employers are planning to give employees this year the largest merit increases since the start of the financial crisis, according to a new survey by Towers Watson (NYSE, NASDAQ: TW), a global professional services company. The survey also found that the hiring freezes that were put into place during the recession are beginning to thaw, especially for professional and technical workers, and positions that require employees with critical skills.

The Towers Watson survey found that companies are optimistic and are budgeting merit increases of 3.0% for 2011. That compares with the 2.7% merit increase awarded to employees overall in 2010 and is the largest merit increase since before the financial crisis when increases typically averaged 3.5 – 4.0%.

Though the horizon is brighter for most companies, the survey also found that 5% of companies plan to freeze salaries for all workers this year, the same percentage as last year. However, 13% of companies plan to freeze salaries for executives while 12% plan to freeze salaries for hourly workers. Both figures are down sharply from 2010.