ROLLING MEADOWS, Ill.,
Aug. 6, 2019 /PRNewswire/
-- While economists and policymakers often argue that
sustained low unemployment incentivizes employers to raise
salaries, many organizations are experimenting with new ways to
prevent base salary costs from rising by more than 3 percent
annually according to Gallagher's 2019/2020 Salary Planning
Survey Report. Employers of all sizes and across all
industries are using variable compensation models and customized
benefit options to attract and retain workers for whom the highest
possible pay may not necessarily be the top factor in deciding
where to work.
The 2019/2020 Salary Planning Survey Report found nearly
four out of 10 (39 percent) organizations now use variable pay for
at least one employee group. While the tight labor market is
directly responsible for the rise in employee referral, hiring and
retention bonuses, 20 percent of employers reported using lump sum
awards for at least one employee group. And approximately one-third
(32-35 percent) rely on variable pay for executive and
manager-level employees, while nearly a quarter (22-25 percent) of
employers also offer variable pay to lower-level employees,
including those already qualifying for overtime pay under the Fair
Labor Standards Act. The portion of compensation subject to
performance rises from 5 percent for low-level workers to 25
percent for executives.
Additionally, more than one out of four (26 percent) employers
indicated higher healthcare costs were a primary factor for keeping
salary increases in check. This aligns with Gallagher's 2019
Benefits Strategy & Benchmarking Survey, where nearly
half (47 percent) of employers noted that controlling employee
benefit costs was a top human resource priority. That said,
employers that implement healthcare cost-sharing tactics, such as
increasing employee premium contributions, must be conscious of the
fact that employees and their families — just like their employers
— suffer the financial pressure of higher healthcare expenses. As a
result, lower salary increases coupled with higher healthcare
expenses can have a negative impact on employee retention.
"Through our in-depth analysis of the data, as well as countless
conversations with employers, decision makers appear reluctant to
raise salaries across the board because this significantly
increases operating costs both in the near and long-term," said
William F. Ziebell, CEO of Gallagher
Employee Benefits Consulting and Brokerage. "It's important to
understand that pay increases are not the only solution for
attracting and retaining employees – particularly Millennials. By
leveraging tailor-made benefits and compensation strategies,
organizations can create a deeper connection with their workforce
and, at the same time, keep expenses in check. A few examples
include flex-time or remote-working options, as well as health and
wellness programs."
ABOUT THE 2019/2020 SALARY PLANNING SURVEY REPORT
The
2019/2020 Salary Planning Survey Report from Gallagher helps
employers make fully informed decisions about compensation and
benefit plans and programs that attract and retain top talent
without breaking the bank. During April and May 2019, the survey captured data from company
leaders, human-resource and financial practitioners representing
943 organizations, with 53 percent of respondents working for
for-profit organizations and 47 percent for non-profits. View the
report here: ajg.com/US-SPS-2019
ABOUT GALLAGHER
Arthur J.
Gallagher & Co. (NYSE: AJG), a global insurance
brokerage, risk management and consulting services firm, is
headquartered in Rolling Meadows, Illinois. The company has operations in 35
countries and offers client service capabilities in more than 150
countries around the world through a network of correspondent
brokers and consultants.
Contact:
Mary Schwartz, Gallagher
847.378.5893
mary_schwartz@ajg.com
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SOURCE Arthur J. Gallagher &
Co.