November 2, 2015
Bonuses & Perks: The New “Normal”?
– Broc Romanek, CompensationStandards.com
According to this NY Times article, there’s been a drastic shift in the type of compensation received by salaried employees. Since the economic crisis in 2008, annual pay raises have markedly decreased – while one-off bonuses & non-monetary rewards have soared. The big question is whether we will see another shift over time or is this the new “normal”? Here’s an excerpt:
According to Aon Hewitt’s annual survey on salaried employees’ compensation, the share of payroll budgets devoted to straight salary increases sank to a low of 1.8 percent in the depths of the recession. It dropped to 4.3 percent in 2001, from a high of 10 percent in 1981. It has rebounded modestly since the recession, but still only rose to 2.9 percent in 2014, the survey of 1,064 organizations found. (These figures are not adjusted for inflation.)
Aon Hewitt did not even start tracking short-term rewards and bonuses — known as variable compensation — until 1988, when they accounted for an average of 3.9 percent of payrolls. Ten years later, that share had more than doubled to 8 percent. Last year, it hit a record 12.7 percent.