Employer Trends for 2011

Outlook for Employers in 2011: PayScale’s Compensation Practices Survey

By Staff Writer

As you look ahead to 2011, what do you expect for your company in terms of hiring and profit growth compared to last year? Are you feeling optimistic? If you are, you’re in the majority according to PayScale’s recent research. PayScale completed its annual survey of HR leaders and business owners and discovered that most of them are looking forward to success in 2011.

Is your competition planning to hand out raises in 2011? Hire new talent? PayScale surveyed them to find out and now we’re giving you their answers. Download PayScale’s Compensation Practices Survey for 2011 and get up-to-date on your market.

In last year’s survey, employers said that they planned to decreased their workforces. But, according to the 2011 survey, the majority actually increased their workforces in 2010. Also, employee retention will continue to be a major focus in 2011 and most employers plan to increase employee pay through merit-based pay practices.

What else did the PayScale Compensation Practices Survey discover? See the highlights below.

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Survey Highlights

• Over 70 percent of respondents say their organization size stayed the same or increased in 2010, compared to 2009 when over 40 percent of respondents said that their organization size decreased.

• In 2010, the top reason for employees leaving an organization was personal reasons (marriage, family, medical, etc.) (53%), compared to 2009 when poor performance (termination) was the top reason (46%).

• The majority of respondents (39%) felt employee retention was a top concern in 2010 and also felt employee retention would continue to be a top concern in 2011 (49%).

• Over 50 percent of large companies decreased their organization size in 2009, while only 20 percent did so in 2010. The top reason for leaving a large company in 2010 was “Seeking Advancement Opportunities Elsewhere,” with 62 percent of respondents giving that answer.

• Companies in manufacturing were most likely to increase their organization’s size in 2010. In 2009, over 60 percent of manufacturing respondents said their organization size decreased, while in 2010 only 19 percent said this.

• In both 2009 and 2010, the majority of respondents chose the CEO as the one responsible for setting compensation at their company: 50.5 percent in 2009 and 52.2 percent in 2010.

• In terms of compensation planning, salary ranges per job group are common, but varying the target market percentile per job group is not.

• The most important compensation objective guiding respondents’ 2010 decisions for all company sizes was “Retaining Top Employees.”

• Regardless of company size, organizations are likely to conduct market and compensation analyses throughout the year: 32 percent of small and medium-sized companies and 44 percent of large companies.

• The majority of companies plan to reward and retain high-performing employees through a merit-based pay plan (50%). The next most common approach is to provide learning and developmental opportunities (45%).

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