“Paying to market” and “Four years of freezes” are the biggest issues for many respondents to a recent survey conducted by the HRhero division of BLR last December.
Other responses to the question, What do you think your organization’s biggest wage-related issue will be at the end of 2012? included:
- A sad one: “We’re just trying to stay in business.”
- A cynical one: “How to squeeze the rank and file employees out of raises so upper management can get even more of the pie.”
- One positive one: “There won’t be any issue if our credit union continues on the same path with excellent earnings.”
- And several expected ones:
- Retention and especially retention of high potential employees
- Cumulative effect of four years of frozen wages
- Health care costs
- How to reward employees without increasing fixed costs.
- Meeting budget numbers but increasing FTE’s.
- And many responses directly related to business issues: profitability, healthcare reimbursements, etc
Other key findings of the survey:
- 40 percent say HR plays a major role in deciding company-wide level for raises
- 50 percent plan raises, while 16 percent will have a wage freeze.
- Raises for hourly employees will range from 1-1.99 percent (13 percent of respondents) 2-2.99 percent (30 percent of respondents), 3-3.99 percent (40 percent of respondents)
- Somewhat higher raises are in store for exempt employees: 1-1.99 percent (11 percent of respondents); 2-2.99 percent (56 percent of respondents) and 3-3.99 percent (46 percent of respondents)
The nearly 200 survey respondents included mostly private organizations, representing an even geographic spread with all states represented, and a mix of industry types with concentrations in manufacturing and healthcare/nursing. All sizes of organization were well-represented.
For details and more interesting data, see the questions and charts below.
What is HR’s role in setting raises at your organization?
| Answer |
Count |
Percentage |
|
Plays a major role in deciding the company-wide level for raises |
84 |
40.00% |
|
Determines each employee’s raise |
16 |
7.62% |
|
Approves each employee’s raise |
47 |
22.38% |
|
Reviews individual raises, but no veto power |
46 |
21.90% |
|
Helps supervisors with tough pay decisions |
85 |
40.48% |
|
Reviews each department’s raises |
66 |
31.43% |
|
Sets pool amounts given to managers to use at their discretion |
25 |
11.90% |
|
Other |
31 |
14.76% |
What changes will your organization make in employee pay in 2012?
| Answer |
Count |
Percentage |
|
Raises |
104 |
49.52% |
|
Bonuses |
46 |
21.90% |
|
Pay cuts |
6 |
2.86% |
|
Reduction in employee hours |
13 |
6.19% |
|
Wage freeze (no change in wages) |
34 |
16.19% |
|
Not sure |
44 |
20.95% |
|
Other |
19 |
9.05% |
If your organization has a wage freeze, how long has it been in effect?
| Answer |
Count |
Percentage |
|
6 months to 1 year |
15 |
7.50% |
|
1-2 years |
12 |
6.00% |
|
2-3 years |
18 |
9.00% |
|
3+ years |
15 |
7.50% |
|
Other |
7 |
3.50% |
|
No answer |
133 |
66.50% |
If your organization has a wage freeze, does it affect all employees or only some?
| Answer |
Count |
Percentage |
|
All employees |
51 |
25.76% |
|
All employees except upper management |
4 |
2.02% |
|
Only hourly workers |
1 |
0.51% |
|
Only exempt workers |
5 |
2.53% |
|
Only contract workers |
0 |
0.00% |
|
Other |
15 |
7.58% |
|
No answer |
122 |
61.62% |
What do you expect will be the average raise for your organization’s HOURLY employees in 2012?
| Answer |
Count |
Percentage |
|
Zero |
27 |
13.64% |
|
1%-1.99% |
26 |
13.13% |
|
2% – 2.49% |
33 |
16.67% |
|
2.5% – 2.99% |
30 |
15.15% |
|
3% – 3.49% |
28 |
14.14% |
|
3.5% – 3.99% |
12 |
6.06% |
|
4% – 5% |
10 |
5.05% |
|
6% or more |
2 |
1.01% |
|
Pay cuts are likely |
1 |
0.51% |
|
Not sure |
15 |
7.58% |
|
No answer |
14 |
7.07% |
What do you expect will be the average raise for your organization’s EXEMPT employees in 2012?
| Answer |
Count |
Percentage |
|
Zero (1) |
32 |
16.24% |
|
1%-1.99% (2) |
21 |
10.66% |
|
2% – 2.49% (3) |
25 |
12.69% |
|
2.5% – 2.99% (4) |
31 |
15.74% |
|
3% – 3.49% (5) |
36 |
18.27% |
|
3.5% – 3.99% (6) |
10 |
5.08% |
|
4% – 5% (7) |
10 |
5.08% |
|
6% or more (8) |
4 |
2.03% |
|
Pay cuts are likely (9) |
2 |
1.02% |
|
Not sure (10) |
18 |
9.14% |
|
No answer |
8 |
4.06% |
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Will the average raise at your organization for HOURLY workers be bigger or smaller than in 2011?
| Answer |
Count |
Percentage |
|
A lot bigger this year (1) |
5 |
2.56% |
|
Slightly bigger this year (2) |
29 |
14.87% |
|
About the same as last year (3) |
89 |
45.64% |
|
Slightly smaller this year (4) |
14 |
7.18% |
|
A lot smaller this year (5) |
9 |
4.62% |
|
Not sure (6) |
22 |
11.28% |
|
No answer |
27 |
13.85% |
Will the average raise at your organization for EXEMPT workers be bigger or smaller than in 2011?
| Answer |
Count |
Percentage |
|
A lot bigger this year (1) |
6 |
3.09% |
|
Slightly bigger this year (2) |
25 |
12.89% |
|
About the same as last year (3) |
88 |
45.36% |
|
Slightly smaller this year (4) |
16 |
8.25% |
|
A lot smaller this year (5) |
11 |
5.67% |
|
Not sure (6) |
21 |
10.82% |
|
No answer |
27 |
13.92% |
Will your 2012 raises be the same across the board (e.g., everyone gets 3%), or will raises vary?
| Answer |
Count |
Percentage |
|
Basically everyone will get the same percentage (1) |
50 |
25.91% |
|
A significant number of employees will have different raises (2) |
42 |
21.76% |
|
Raises will be all over the map (3) |
52 |
26.94% |
|
Other |
31 |
16.06% |
|
No answer |
18 |
9.33% |
What is the most important factor that commonly affects employees’ raises?
| Answer |
Count |
Percentage |
|
Merit |
86 |
45.50% |
|
Seniority |
1 |
0.53% |
|
Job classification |
5 |
2.65% |
|
Which department or division they’re in |
3 |
1.59% |
|
Approval of board of directors |
11 |
5.82% |
|
Approval of government board, commission, legislature, etc. |
10 |
5.29% |
|
Company profits |
33 |
17.46% |
|
Competitors’ wage rates |
5 |
2.65% |
|
Cost of living adjustment |
12 |
6.35% |
|
Other |
13 |
6.88% |
|
No answer |
10 |
5.29% |
Will your company use bonuses instead of raises to increase employees’ pay in 2012?
| Answer |
Count |
Percentage |
|
Yes |
9 |
4.71% |
|
No |
108 |
56.54% |
|
We will use a combination of raises and bonuses to increase employees’ pay |
53 |
27.75% |
|
Don’t know |
10 |
5.24% |
|
No answer |
11 |
5.76% |
Will you give bonuses to employees at the end of 2011?
| Answer |
Count |
Percentage |
|
Yes, to most or all employees |
47 |
24.74% |
|
Yes, to some employees |
23 |
12.11% |
|
No |
92 |
48.42% |
|
Depends on company profits |
10 |
5.26% |
|
Not sure |
6 |
3.16% |
|
No answer |
12 |
6.32% |
If you give bonuses, how are they determined?
| Answer |
Count |
Percentage |
|
Performance-based only |
28 |
13.33% |
|
Across the board only |
9 |
4.29% |
|
A combination of performance and across the board raises |
12 |
5.71% |
|
Bonuses are set based on the company’s profits or performance |
61 |
29.05% |
|
Not sure |
6 |
2.86% |
|
Other |
28 |
13.33% |
How do your bonuses this year compare to last year?
| Answer |
Count |
Percentage |
|
About the same |
40 |
21.05% |
|
Bigger this year |
19 |
10.00% |
|
Smaller this year |
21 |
11.05% |
|
Bonus this year, none last year |
10 |
5.26% |
|
Bonus last year, none this year |
4 |
2.11% |
|
No bonus this year or last year |
33 |
17.37% |
|
Not sure |
15 |
7.89% |
|
No answer |
48 |
25.26% |
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Think of a typical position in your organization that includes many employees. How long has it been since you compared the pay rates for this position to the local market or to other employers?
| Answer |
Count |
Percentage |
|
Less than a year |
61 |
32.11% |
|
1 year |
45 |
23.68% |
|
2-3 years |
43 |
22.63% |
|
4-5 years |
12 |
6.32% |
|
More than 5 years |
8 |
4.21% |
|
Never |
6 |
3.16% |
|
Not sure |
7 |
3.68% |
|
No answer |
8 |
4.21% |
Does your company do a good job giving raises in a fair, effective manner that furthers your company’s goals? Give a grade from A (excellent) to F (failing).
| Answer |
Count |
Percentage |
|
A |
18 |
9.47% |
|
B |
66 |
34.74% |
|
C |
52 |
27.37% |
|
D |
25 |
13.16% |
|
F |
10 |
5.26% |
|
No answer |
19 |
10.00% |
Will your organization use any of the following in 2012 to manage its employee wage costs?
| Answer |
Count |
Percentage |
|
Temporary workers |
68 |
32.38% |
|
Independent contractors |
30 |
14.29% |
|
Moving full-time workers to part-time status |
21 |
10.00% |
|
Layoffs |
27 |
12.86% |
|
Furloughs |
9 |
4.29% |
|
Hiring freeze |
34 |
16.19% |
|
Other |
20 |
9.52% |
How do you set the compensation for a new position?
| Answer |
Count |
Percentage |
|
Research local job market |
97 |
46.19% |
|
Research competition |
55 |
26.19% |
|
Research location, industry, and position salary data |
96 |
45.71% |
|
Compare against similar positions within the organization |
116 |
55.24% |
|
Rank position within the organization |
51 |
24.29% |
|
Consider chosen applicant’s previous salary |
48 |
22.86% |
|
Participate in salary surveys to obtain salary data for similar positions in my area/industry |
81 |
38.57% |
|
Other |
6 |
2.86% |
What service/information source do you use for comparative wage/compensation information?
| Answer |
Count |
Percentage |
|
ERI (Economic Research Institute) |
24 |
11.43% |
|
Salary.com |
66 |
31.43% |
|
BLR |
33 |
15.71% |
|
Bureau of Labor and Statistics |
62 |
29.52% |
|
O-Net Online |
11 |
5.24% |
|
Trade associations (applicable industry, SHRM, etc.) |
84 |
40.00% |
|
Consultants (Towers Watson, Mercer, etc.) |
40 |
19.05% |
|
Online Recruiters (Monster.com, CareerBuilder, etc.) |
32 |
15.24% |
|
Other |
41 |
19.52% |