The experts have spoken: The recession’s officially over. And a lot of employers are taking a hard look at their compensation structure.
You’ve probably heard that the National Bureau of Economic Research has declared that the recession that started in December 2007 ended in June of last year.
That announcement coincides with recent research that indicates many organizations are beginning to assess the impact that two years of salary freezes and limited pay increase budgets had on their base salary programs.
A matter of balance
Since zero-to-minimum salary increases have become common over the last couple of years, many employers have concerns about whether their employees will stay once the economy improves, according to a study from consulting firm Mercer HR.
Almost four in 10 (38%) of the firms surveyed have reviewed their overall comp programs this year, Mercer said.
It’s an attempt to strike the correct balance: Employees want to know their pay is fair and competitive. And employers want to ensure that salary budgets are affordable, sustainable and support business objectives.
What are companies looking at? Mercer pinpoints three major areas:
- salary program design (pay ranges and criteria for setting them)
- salary increases (who decides who should get raises, and how big they should be), and
- communicating salary information to managers and employees.
The survey canvassed about 550 employers across a broad selection of industries throughout the U.S. and Canada.