LIVONIA, Mich., Nov. 25, 2014 /PRNewswire/ -- According to a survey recently conducted by the American Society of Employers (ASE), the tight talent market in Michigan is driving employers to increase variable compensation programs - better known as incentive pay - in order to compete for and retain high-performing employees.
The survey shows in 2014, annual bonuses represent the leading incentive pay strategy, with 73 percent of employers offering bonuses to their executives; 66 percent to exempt salaried employees (salaried employees except officers/executives not subject to overtime pay); and 55 percent being offered to non-exempt employees (employees subject to overtime rules).
Other variable compensation strategies include individual incentives, gainsharing, profit sharing and team-based incentives. After controlling for differences between the 2013-2014 and 2014-2015 surveys, ASE observed profit sharing and individual incentives were the second and third most leading compensation strategies used. Looking at exempt salaried employees alone, profit sharing jumped by 4 percent year-over-year.
"As the economy continues to improve, the job market is also heating up, making it potentially more difficult to retain top employees who may have previously stayed due to fewer competitive opportunities," said Mary E. Corrado, president and CEO of ASE. "What our findings tell us is that employers today are reacting to a more competitive environment by prioritizing and utilizing variable compensation programs – a trend we expect to continue to grow each year."
The survey also revealed the majority of employers maintained a standard of 3 percent for budgeted salary increases for the 2014 work year, and anticipate similar increases for 2015. Wage freezes are also expected to continue to decline with the improving Michigan economy, dropping from 67.8 percent in 2009 to fewer than 6 percent in 2015.
The survey was taken by over 200 businesses across Michigan, representing small, mid-size and enterprise organizations and a variety of industries. To obtain a copy of ASE's 2014/2015 Salary Budget Survey, contact ASE's Compensation and Benefits Surveys department at [email protected] or 248.353.4500. This survey is available free of charge to ASE members, and for $525 to non-members.
About the American Society of Employers
The American Society of Employers (ASE) is a not-for profit Human Resources membership organization with more than 900 member firms of all types across the state of Michigan. ASE has been in business for more than 110 years and has conducted surveys for more than 60 years. In addition to providing timely benchmark data on critical Human Resource issues, ASE provides direct support for members through advice, training and recruiting. For more information, visit www.aseonline.org.
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SOURCE American Society of Employers