Organizations Look Beyond Base Pay to Attract and Retain Key Employees, According to Hewitt Associates
07 Setembro 2010 - 8:00AM
PR Newswire (Canada)
TORONTO, Sept. 7 /CNW/ -- Salary Increases for 2010 and 2011 Remain
Below Three Per Cent TORONTO, Sept. 7 /CNW/ - While average
national salary increases awarded in 2010 were higher than those
granted in 2009, they are still considerably lower than raises
provided earlier this decade, according to the 32nd annual Canada
Salary Increase Survey conducted by Hewitt Associates, a global
human resources consulting and outsourcing company. In June/July,
more than 500 organizations from across the country representing
more than 835,275 employees responded to the survey. The biggest
difference between this year and last year is a reduction in the
number of salary freezes. In 2009, nearly three in ten employers
(29.2 per cent) imposed a salary freeze, awarding no increases to
some or all employees. In 2010, the number of companies with salary
freezes dropped to about 1 in 12 (8.2 per cent). Other positive
news is that the percentage of organizations considering pay cuts
dropped from nine per cent to less than one per cent between 2009
and 2010, and the number planning layoffs fell from 30.7 per cent
to 11.8 per cent. There was also an upward, but conservative, trend
in salary increases this year. The average salary increase was 2.6
per cent nationally in 2010, up from the 2.2 per cent increase
awarded in 2009. Saskatchewan led the country this year, as it did
in 2009, with pay increases averaging 3.7 per cent, although this
figure represents a decrease from the 4.2 per cent salary increases
awarded last year. Atlantic Canada had the next highest 2010 salary
increases at 3.3 per cent, while Alberta (3.1 per cent), Manitoba
(2.9 per cent) and Ontario (2.5 per cent) followed. British
Columbia and Quebec had the lowest 2010 increase rates at 2.4 per
cent. "The differences reflect relative weaknesses in the
manufacturing and service industries and relative strengths in
mining and energy," said Toronto-based Hewitt consultant Prashant
Chadha. "Of course, public sector employers are also facing tight
budgets, as well as legislation, such as that in Ontario, that
limits their ability to grant pay increases." According to Chadha,
"While the trend is definitely positive, the numbers are still
lower compared to what we saw in the early part of the decade.
Through 2008, salaried workers could realistically expect pay
increases in the range of 3.5 per cent to 4.5 per cent. Now, even a
company's top performers may receive less than three per cent. The
turnaround is likely to continue to be slow, since employers are
predicting average pay increases nationally of only 2.9 per cent in
2011." Higher Pay for Higher Performers Even though overall salary
increases are modest, certain employees at many organizations have
the opportunity to earn additional compensation. "Twenty-seven per
cent of employers hold some of their compensation budget in reserve
to provide additional base pay increases to highest performing
employees and 14 per cent provide discretionary restricted stock or
stock options," stated Jeff Vathje, Hewitt's Calgary-based national
compensation leader. "In addition, 84 per cent of survey
respondents offer variable pay programs. If properly designed and
communicated, these plans both incent and reward employees. They
earn more pay based on individual and/or corporate performance
where business objectives are achieved." Because salary increases
are lower than in prior years, it is especially important to
provide top producers with the opportunity to earn more. "Once the
economy turns around, frustrated employees are going to start
leaving," said Vathje. "An organization's high performers are often
also the most ambitious and the most attractive to other companies.
If an employer isn't providing its top employees with opportunities
to increase their pay, it's at significant risk of losing those
high performers." Hanging On to Top Employees: Immediate Action
Items To prevent the loss of key talent, companies need to act now,
before the economy rebounds completely. Beyond the opportunity to
earn greater pay, there are several additional methods to engage
top performers. "Our research suggests that high performing
employees want opportunities to do new and interesting tasks," said
Rob Lewis, a senior consultant in Hewitt's Toronto office. "They
want to be able to give input and interact with leaders. And they
want to know that there are opportunities to advance. These
employees tend to be restless and easily bored if they're not
moving forward, so organizations need to make sure they are
continually challenged and recognized for their achievements."
Employers should also focus on manager development, according to
Lewis. "Organizations need to work with their managers to ensure
they understand how to reward high performers and keep them happy.
Many managers are promoted because they have good technical skills,
but they lack the ability to manage people well. An investment in
developing better managers can pay great dividends in the future as
those managers become more effective at recognizing, rewarding and
developing top talent." It is critical for organizations to be
proactive. "Now is not the time for employers to be passive,"
stated Lewis. "While the economy limits what companies can spend to
keep top talent, that doesn't mean they are helpless. The best
employers get creative in these times to ensure that, once the
economy picks up, their top performers are saying 'I want to
stay'." Copies of the Hewitt Associates' 32nd annual Canada Salary
Increase Survey are available at www.compensationcenter.com. About
Hewitt Associates Hewitt Associates (NYSE: HEW) provides leading
organizations around the world with expert human resources
consulting and outsourcing solutions to help them anticipate and
solve their most complex benefits, talent, and related financial
challenges. Hewitt works with companies to design, implement,
communicate, and administer a wide range of human resources,
retirement, investment management, health care, compensation, and
talent management strategies. With a history of exceptional client
service since 1940, Hewitt has offices in more than 30 countries,
including Canadian offices in Calgary, Montreal, Regina, Toronto
and Vancouver, and employs approximately 23,000 associates who are
helping make the world a better place to work. For more
information, please visit www.hewitt.com/canada. Marcia McDougall,
Hewitt Associates, 416.227.5713, marcia.mcdougall@hewitt.com
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