The strong economic outlook has companies brimming with optimism. Almost three times as many employers -- 42% -- plan to increase headcount this year compared with the 15% who plan to reduce their workforces. In addition, the 1999/2000 U.S. Compensation Planning Survey by William M. Mercer Inc. found that companies plan to increase the size of raises they give to management, technical, professional, nonexempt, and hourly employees. "The uptick in salary increases -- especially at lower pay levels -- reflects the tightening labor market and growing shortage of workers," says Steven E. Gross, principal in Mercer's Philadelphia office and director of the firm's U.S. employee compensation practice.