‘Tis the season for holiday parties, gift swaps, and … budgets, if you’re in compensation and total rewards. Perhaps your organization is ahead of the curve and you’ve already figured out 2017. Or maybe you’re in the process of preparing your recommendations to review with finance.
Regardless, it’s the time of year when many of us think about how we reward employees and what it will take to remain competitive in 2017.
A survey from Willis Towers Watson shows that pay raises for employees are expected to remain at 3% in 2017 – the same increase for the past three years. Even executives are only expected to receive a 3.1% increase next year.
Laura Sejen, managing director, Rewards, at Willis Towers Watson explains that many companies, “are starting to question how those budgets are spent and whether their conventional approaches to salary planning are delivering a good return on that 3% investment.”
Interestingly, the same survey shows that annual performance bonuses will decline slightly next year, while discretionary bonuses will increase slightly.
Sandra McLellan, North America practice leader, Rewards, at Willis Towers Watson adds:
Incentives tied to individual and company performance continue to play a greater role in an employee’s total rewards package. Unlike salaries, incentives are variable and give employers much greater discretion in rewarding employees for performing at superior levels. During times when employees have greater opportunities to seek employment elsewhere, employers need to evaluate their total rewards strategies and programs to ensure their top employees don’t take their skills elsewhere.
McLellan’s call for employers to evaluate their current programs raises some interesting questions. What does your plan look like for 2017? How will you recognize employees’ efforts? Are you maintaining status quo or trying something new? Have you looked at the ROI of your current total rewards strategy?
How much budget you get may be out of your control, but what you spend that budget on is an opportunity to get more value – engagement, retention, performance – from your investment.
Happy budgeting!
‘Tis the Season to Evaluate Your Total Rewards Strategy
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