Rewards Systems Aid in Employee Retention
Date: October 10 2012
Kansas City, Kan. – As the job market slowly continues to open up, more employers are seeking ways to attract and retain the most valuable talent, and many are looking to rewards systems to facilitate this process. The Compdata Surveys BenchmarkPro 2012 survey results found 82.8 percent of employers offer merit increases as one of the many systems used to reward employees. The average merit increase budget reported for 2012 was 2.7 percent, with 2.8 percent projected for 2013.
Bonuses are a popular reward option, as they are offered by 67.6 percent of employers surveyed. Nearly 40 percent of organizations use incentive pay, compared to spot incentives at 23.6 percent. Skill-based pay is utilized by 12.6 percent of survey respondents and key contributor rewards are used the least, 4.9 percent.
Reward systems often vary by industry as 81.9 percent of services employers report using bonuses. Hospitality and manufacturing and distribution organizations use bonuses at a rate of 77 percent and 74.5 percent, respectively. Fifty-three percent of employers in healthcare use bonuses, while only 39.5 percent of companies in utilities use them to reward employees.
"Recognition and rewards systems are crucial to employers looking to retain top talent, especially as the job market improves," said Amy Kaminski, vice president for Compdata Surveys. "Some studies suggest as the job market rebounds, more employees will be looking to leave their current jobs in pursuit of new opportunities. Simply recognizing employees for a job well done can have a huge impact on employee morale, and in turn retention rates."
Although the unemployment rate dropped to a 44-month low last month, the economy continues to be in a somewhat volatile position, with many companies still recovering from the recession. Some employers may be wary of granting sweeping pay increases to their staff. These reward systems provide employers with a viable alternative to traditional pay increases, while still recognizing their key employees.
About the Survey
BenchmarkPro 2012 provides a comprehensive summary of pay data and pay practices with an effective date of March 1, 2012. More than 400 general industry benchmark titles were surveyed, with data collected from nearly 34,000 organizations across the country.
Compdata Surveys has been providing comprehensive data at affordable prices to organizations from coast to coast since 1988 and is the nation's leading compensation and benefits survey data provider. Thousands of organizations provide data in each of our eight industry specific surveys each year, ensuring the reliability of our results. For more information about the compensation and benefits surveys, contact Michelle Willis at (800) 300-9570.