{"id":7297,"date":"2011-10-21T11:26:39","date_gmt":"2011-10-21T11:26:39","guid":{"rendered":"https:\/\/affinityhrgroup.com\/2019\/05\/managing-your-2012-compensation-dollars-effectively\/"},"modified":"2011-10-21T11:26:39","modified_gmt":"2011-10-21T11:26:39","slug":"managing-your-2012-compensation-dollars-effectively","status":"publish","type":"post","link":"https:\/\/theworkplaceadvisors.com\/managing-your-2012-compensation-dollars-effectively\/","title":{"rendered":"Managing Your 2012 Compensation Dollars Effectively"},"content":{"rendered":"<p><strong>Compensation Trends that May Impact Your Business<\/strong><\/p>\n<p>2011 is quickly drawing to a close. But before the year ends, it\u2019s time to look forward to 2012 and some compensation issues and trends that may impact you and your employees in the New Year.<\/p>\n<p>The highly anticipated economic recovery of 2011 didn\u2019t happen for many businesses. Business growth continues to be sluggish while overhead costs continue to increase. And many top economists predict more of the same for 2012.<\/p>\n<p>All this may mean that your organization doesn\u2019t have a lot of extra money to increase employee compensation. As a result, it\u2019s important to plan your compensation spending to get more bang for your limited bucks. As you start your 2012 compensation planning, here are some things to be aware of:<\/p>\n<p><strong>2012 Salary Budget Projections<\/strong><br \/>\nEarly 2012 salary projections forecast pay raises of 2.8% &#8211; 3.0% for most employee groups across industries. Salary increases are expected to be highest in the Western and South Central areas of the United States and lowest in the Southeast. These figures represent a slight increase from 2011, but still remain much lower than the 4% &#8211; 5% budgets of the early 2000\u2019s.<br \/>\nThese smaller forecasts are particularly challenging for employers using a merit-based pay system that attempts to recognize and meaningfully reward differing levels of performance. If you\u2019re attempting to keep your salary expenditures to a pre-set budget amount of 3%, the majority of employee increases will fall between 2% and 4% &#8211; not a big difference, especially for lower-paid employees.<\/p>\n<p><strong>Growth of Incentive\/Bonus Plans<\/strong><br \/>\nMany employers are choosing to supplement (or even replace) their merit-based pay programs with incentive and bonus payments. Awarding incentive or bonus payments based on individual, team, and\/or organizational performance results is becoming an increasingly common practice across industries and includes organizations of all sizes and employees doing all types of work. A recent Payscale.com survey reported that approximately 60% of surveyed organizations will make some payment of this type in 2011.<\/p>\n<p>By linking payments under these plans to the achievement of specific goals organizations can reward results that directly increase profitability. And since these payments are generally one-time occurrences that don\u2019t increase base salaries, the amounts can often be larger and more meaningful to employees.<\/p>\n<p><strong>Health Care Cost Increases<\/strong><br \/>\nA recent Pricewaterhouse Coopers report projects employer health care costs to increase approximately 8.5% in 2012. Although this number is lower than in previous years, most employers will expect their employees to share these increased costs by raising deductibles, increasing co-pays, and increasing employee share of premiums.<br \/>\nWith salary increase projections for 2012 averaging only 3%, many employees will see an actual decline in their pay. As the job market improves and competition for skilled workers increases, employers will be challenged to offer competitive salary and benefit packages to recruit new talent and retain existing talent.<\/p>\n<p><strong>Lower Unemployment Rates<\/strong><br \/>\nWe see and hear a lot of information that focuses on the high national unemployment rate (9.1% as of July, 2011) and the high unemployment in some states and cities. (12.9% for the state of Nevada, 30.8% in El Centro, California).<\/p>\n<p>The facts are that these numbers vary considerably between locations, and that unemployment in your location may actually be on a downward trend. The United States Department of Labor \u2013 Bureau of Labor Statistics reports that unemployment rates decreased between July, 2010 and July, 2011 in 257 of the 372 metropolitan areas it regularly surveys.<br \/>\nThe chart below shows the 5 states with the lowest unemployment rates as of July, 2011. An unemployment rate of 4% or under is generally considered full employment.<\/p>\n<table border=\"0\">\n<tbody>\n<tr>\n<td><strong>State<\/strong><\/td>\n<td><strong>Unemployment Rate as of 7\/11<\/strong><\/td>\n<\/tr>\n<tr>\n<td>North Dakota<\/td>\n<td>3.3%<\/td>\n<\/tr>\n<tr>\n<td>Nebraska<\/td>\n<td>4.1%<\/td>\n<\/tr>\n<tr>\n<td>South Dakota<\/td>\n<td>4.7%<\/td>\n<\/tr>\n<tr>\n<td>New Hampshire<\/td>\n<td>5.2%<\/td>\n<\/tr>\n<tr>\n<td>Oklahoma<\/td>\n<td>5.5%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Economists and employer polling firms predict that up to 85% of people currently employed are \u201cwatching and waiting\u201d for a better job opportunity. As the economy improves, the potential impact on employers is significant.<\/p>\n<p>So as 2012 approaches, it\u2019s time to do some compensation planning. If you\u2019re unsure where to start, begin by looking at how your salaries compare to your competitors and how your compensation expenditures compare with averages. Your state\u2019s Department of Labor may publicize valuable wage and employment data \u2013 make sure that you take advantage of the information available to you And perhaps 2012 is the year to begin thinking about adding a new bonus or incentive plan or enhancing an existing plan that isn\u2019t working so well any more. Taking these steps now can benefit your organization and your employees not just next year but in the years beyond.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Compensation Trends that May Impact Your Business 2011 is quickly drawing to a close. But before the year ends, it\u2019s time to look forward to 2012 and some compensation issues and trends that may impact you and your employees in the New Year. The highly anticipated economic recovery of 2011 didn\u2019t happen for many businesses. [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7297","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Managing Your 2012 Compensation Dollars Effectively - The Workplace Advisors<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/theworkplaceadvisors.com\/managing-your-2012-compensation-dollars-effectively\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Managing Your 2012 Compensation Dollars Effectively - The Workplace Advisors\" \/>\n<meta property=\"og:description\" content=\"Compensation Trends that May Impact Your Business 2011 is quickly drawing to a close. 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