In August, I talked (Sahra's Sacramento Area HR Association) monthly luncheon for the members on "Emerging Trends in compensation." Part of the presentation showed projections for 2008 salary budgets, which seem to continue to wage the modest budgets of the past 5 follow up to 7 years in terms of just under 4%. World at Work is planning a salary budget of 3.9% for all employers in several regions and sectors.
Smaller companies reported the highest actual salaryBudget increases this year to 4.1%. And the biggest companies with more than 20,000 employees and a budget of 3.7%. But creep field of public administration is still facing enterprises in the private sector with 4.3% salary increase budget (in addition to offering rich benefits packages for employees). No wonder it's so hard to employees in cities with a lot of employment in the public sector, such as Sacramento recruiting!
A practical tip you could use to pay for certain employee groupsDifferent percentages merit pool based on movement in the market. For example, your IT department is scheduled for a 4.3% merit budget, please contact your administrative staff, an increase of 3.7% of budget and production employees will receive a budget of 3.5%. The overall proportion of U.S. dollar terms in the 4.0% of the total income increase in the '08 budget. In this scenario, you are still capable of some groups of employees to a higher dollar amount or within your entire stay rewardBudget. You can also reward your employees better with improved performance in these occupations.
So you can rightly ask, in order to enhance employee benefits and Gasoline prices in a tight labor market, why be modest salary budget increases? It is because there is a direct link between the cost of benefits and size of the value of a company's budget. There are only so many dollars a company can afford to spend on their salaries and benefits for employees. So, if theIncreased cost of services, it serves to contain the costs of wages. The company has a "split pie" in a finite number of "pieces" and if the cost of the benefits claimed a larger share of the pie, there are fewer to go around for the wage increases.
As competition intensified begin to attract qualified candidates from as boomers leaving the workplace, employers expect candidates to request from many pay packages. Especially for skilled professional and technicalAre candidates for the managers to experience increasing difficulties in procurement and recruitment, initial pay packages which can sign-on bonus, and include / or commitment to a performance review with a possible pay increase after six months of employment. Variable pay continues to be a growing method used by companies to increase total compensation to and from the same time the costs.
The long-term effects of the introduction of new commitment in your company at an increased salary rates compared tothose of current employees creates compression in premium rates between new hires and "older" employees. Finally, you must set up the payment of your long-term employees to retain them and to remain competitive in your compensation practices.
Until the cost of services, or flat, until the job market narrows as boomers retire and the cost of wages will drive up, you can expect the salary budgets to keep the 4% mark. And it is not clear that there is noshort-term relief in sight .....
Copyright 2007, Regan HR, Inc.
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