Issue link: https://www.e-digitaleditions.com/i/295251
[ 26 ] HRO TODAY MAGAZINE | APRIL 2014 Payroll PayScale's annual survey of compensation best practices reveals more encouraging economic signs than seen in recent years as companies are growing in size and offering raises to current employees. Yet this increased optimism comes along with a good dose of caution as most companies lack sufficient business insight to know what to pay to effectively attract and retain the right people. Competition for key talent is also heating up. Growth and hiring surges are causing big concerns about retention as employees leave for greener pastures. With the more competitive economy of 2014, companies will be challenged to balance growth with smart decisions about how to compensate talent. Organizations are cautiously optimistic about 2014, with 72 percent expecting their financial situation to improve (up from 66 percent in 2013), and only 5 percent expecting it to weaken (down from 7 percent in 2013). Small companies are the most optimistic about their future financial performance (75 percent of respondents) beating out both large and medium companies, where 66 percent and 72 percent expect improvement in 2014. The information, media, and telecommunications industry is planning to fly the highest in 2014, with 84 percent of companies in this industry anticipating improved financial performance. Hiring is also up over recent years with 54 percent of companies reporting plans to continue expanding in 2014. Raises returned in 2012 and that trend continued with 83 percent awarding salary increases in 2013, and 88 percent planning to give raises in 2014, with the average raise expected to be 4.5 percent. The most common reason for raises was performance-based pay increases (54 percent). Bonuses were also a popular option. In 2013, 75 percent of respondents awarded bonuses, up from 71 percent in 2012. The most common type of bonuses given were individual incentive bonuses (50 percent). Factors and Considerations Talent retention. Competition is heating up and it's becoming increasingly challenging to strike the balance between paying enough to retain top talent and adhering to the compensation budget. Talent retention continues to be the primary concern among businesses. In 2009, only 28 percent of companies listed retention as their top concern, but by 2013 that number more than doubled, increasing to nearly 60 percent. That number jumps to 70 percent in the information, media, and telecommunications industry and 65 percent in professional, scientific, and tech services industry —two industries where tech jobs are highly represented. Compensation Comparison A new report reveals now is the time to leverage pay to attract and retain the right talent. By Tim Low