With the employment outlook improving, employers in the United States are focusing compensation programs on hiring and retaining top talent, according to a report released by Buck Consultants, a Xerox company.
Nearly two-thirds (63 per cent) of organizations reported using hiring bonuses and 41 per cent use or expect to implement retention bonuses, found Reviving and Inspiring the Workforce: 2011 Compensation Trends Survey.
For those employees participating in a bonus program, eight out of every 10 can expect to receive a payout in 2011. Forty-four per cent of employers expect to pay bonuses that are at least five per cent larger than last year, found the survey of more than 100 employers.
“During the economic downturn, many employers reduced staff and asked remaining employees to do more with less. As the job market improves, these organizations are using tactics such as employee referral bonus programs to not only attract proven performers, but also help retain the employees who make referrals,” said Kathi Myers, a director at Buck Consultants. “Involvement in the hiring process engages employees and strengthens their ties to the organization.”
Survey respondents reported using the following strategies to engage workforces:
• new career development opportunities (41 per cent)
• market pay adjustments (30 per cent)
• larger base pay increases (24 per cent)
• more non-cash recognition (18 per cent).
The use of employee referral bonuses has also gone up in the past six months to 66 per cent, compared to 59 per cent in mid-2010, found Buck Consultants.
As employers become more confident in the improving economic environment, pay freezes are thawing and median pay increases are expected to rise to three per cent this year — similar to levels seen immediately prior to the recession and up from 2.7 per cent in mid-2010 and 2.2 per cent at the beginning of 2010.
Only nine per cent of employers still have pay freezes in place, down from 48 per cent in mid-2010 and 64 per cent at the start of 2010, found the survey. Three-quarters of respondents reported taking no special actions such as furloughs, layoffs, hiring freezes or bonus suspensions in the last 18 months to control or reduce labour costs. Instead, dollars are now being approved and invested in programs that will produce the best return — the attraction and retention of key talent, said Reviving and Inspiring the Workforce.
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