In a 2013 overview of the state of compensation, Steve Bruce, contributor to HR Daily Advisor, makes a less than rosy comparison of where businesses stand today versus where a full economic recovery would have put businesses in terms of their compensation options. Employment overall is up and voluntary separations are beginning to increase, but for businesses looking to attract and retain top performing employees, rewarding these individuals through traditional compensation methods remains a challenge.
With merit increases averaging right around 3% according to World at Work, and several local surveys also pointing to the 3% mark, Bruce suggests that in fact, 3% may be the new norm. While it may not seem like much on paper, it is worth noting that 2012 was the first post-recession year that pay adjustments, merit based or not, hit that 3% threshold. At the macro level, 2012 also saw the percentage of Northeast Ohio organizations predicting at least some pay increase to 89%, a significant recovery in comparison to the all time low of 45% in 2009 (2012 ERC Pay Adjustment & Incentive Practices Survey).
But if these statistics don’t convince your best employees to stay put, Bruce gives a few suggestions about how to make the most of your compensation budget when it comes to keeping your best employees- e.g. retention bonuses, referral bonuses and hiring bonuses. Locally, 75% of organizations participating in the 2012 Pay Adjustment & Incentive Practices Survey indicated that they gave out employee bonuses. Typically these were offered on an annual basis and were most commonly based on budget numbers (32%) or individual employee improvement measures (27%).
For access to more ERC Compensation Survey Data, click here.