Dynamic trends

PAY FOR PLAY
Employees who are compensated for work well-done are more motivated and more likely to stay.

By Marissa Rodriguez

It’s no surprise that top talent is attracted to first-rate compensation. But today, as highly skilled professional workers become harder to come by, employee candidates are taking a closer look at benefits packages and company “work-life” policies, according to a new study.
In its third annual Rising Above the Average: Hudson’s 2007 Compensation and Benefits Report, the Hudson Index polled 10,000 U.S. workers on their pay, their benefits package and what they think of executive pay.
When asked what they would alter that would make them happier with their compensation package, respondents selected more money first, followed by improved health care benefits, retirement benefits, work-life balance and paid time off, respectively.
“Employers should create pay programs that acknowledge what workers are worth to the company based on their knowledge and experience,” Robert Morgan, president of Hudson Talent Management, says in the report.
Based on the numbers, those are the sentiments of the respondents.
Although the number of employees who report that their companies base salary on performance is growing slowly, it is more likely that workers will be pleased with their compensation if it is based on performance than not. Hudson reports that 79 percent of workers who are paid based on their performance are satisfied with their compensation and benefits package, compared to 60 percent of those who are not paid based on performance.”
The report also states that companies get a better return on investment when employee performance and pay are closely interrelated, and that pay-for-performance is a good strategy for retaining talent.
“Employee aspirations must be taken into account as well,” Morgan says.
In addition to earnings and benefits, employees were also interested in companies that allow for lateral moves if those moves provide opportunities to learn more skills, the study revealed.
The survey was conducted in April 2007 and included responses from professionals in several sectors including accounting and finance, healthcare, information technology (IT), legal, manufacturing and other services. Hudson is a provider of permanent recruitment, contract professionals and talent management services worldwide.

TOPLINE FINDINGS
* In 2001, 35 percent of workers said that high performers get more money and benefits. In 2007, the percent who said the same climbed to 41.
* Employees who perform better receive better pay and benefits say 56 percent of managers.
* Seventy percent of workers say they understand how management is evaluating their work as it relates to compensation. The more workers earn, the more likely they are to understand the relationship.

BENEFITS PACKAGES
* Health insurance is a popular option: 64 percent of workers take part in their company’s plan. Twenty-one percent work for a company that does not offer one, but of those, 64 percent have other insurance.
* Thirty percent of workers are employed by companies that do not have retirement plans.
* Employees ages 18 to 29 are more likely to work for companies without retirement plans.