Forecasted Base Salary Increases Remain Steady

   PHILADELPHIA - (BUSINESS WIRE) - 2/4/2012 - U.S. employees can expect median base salary increases of 3.0 percent in 2012, according to recently released Hay Group research. The median increase of 3.0 percent is consistent for executives, middle management, supervisory and clerical positions. This picture is relatively steady across most industry sectors, and after factoring in annualized consumer price index growth at 3.0 percent, expected employee wage growth is in line with inflation.
   “Even though the economy continues to show signs of a slow recovery, we do not expect most employees to receive increases at the levels seen in the years prior to 2008 for awhile, when median increases were tracking between 3.5 percent and 4.0 percent,” Hay Group’s North American Reward Practice Leader Tom McMullen said.

   “Slower growth in base salary increases is causing most organizations to be innovative in their approach to reward management. We see most organizations having a continued focus on managing their fixed costs in base salary and benefits programs while placing renewed attention on retention and engagement strategies for the talent needed to run their business. Differentiating all rewards and ensuring that top performers receive rewards that are greater than average performers is a continued focus area for organizations. Organizations are quite happy to pay for performance, but only if they get it.”

   While most industry sectors are also consistent with this 3.0 percent median base salary increase, including industrial, retail and financial services sectors, the economy impacts industry sectors differently. Certain job families in healthcare systems, such as nursing and clinical employees, are trending at 2.5 percent median increases, while employees in the oil and gas sectors are faring better with 4.0 percent median increases planned for 2012.

   Hay Group’s forecast results are based on the latest data available from Hay Group’s U.S. database, provided by 285 organizations in November and December 2011. This is Hay Group’s 33rd year of conducting the survey. Typical respondents to the survey include compensation professionals in the Human Resources departments of small to large size U.S. organizations across a wide range of industries.

Report: Caregiving Costs Weigh on Americans

  WESTPORT, Conn.- (BUSINESS WIRE) - 6/14/2011 - Americans who provide care for their aging parents lose an estimated three trillion dollars in wages, pension and Social Security benefits when they take time off to do so, according to “The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents.”
   Produced by the MetLife Mature Market Institute in conjunction with the National Alliance for Caregiving and the Center for Long Term Care Research and Policy at New York Medical College, the study reports that individually, average losses equal $324,044 for women and $283,716 for men. The percentage of adults providing care to a parent has tripled since 1994.
    The researchers analyzed data from the National Health and Retirement Study (HRS) to determine the extent to which older adult children provide care to their parents. They also studied gender roles, the impact of caregiving on careers and the potential cost to the caregiver in lost wages and future retirement income.
    “Nearly 10 million adult children over the age of 50 care for their aging parents,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Assessing the long-term financial impact of caregiving for aging parents on caregivers themselves, especially those who must curtail their working careers to do so, is especially important, since it can jeopardize their future financial security.”
    In addition, the study found that:
    Adult children age 50+ who work and provide care to a parent are more likely than those who do not provide care, to report that their health is fair or poor.
    The percentage of adult children providing personal care and/or financial assistance to a parent has more than tripled over the past 15 years and currently represents a quarter of adult children, mainly Baby Boomers.
   Working and non-working adult children are almost equally likely to provide care to parents in need.
   Overall, caregiving sons and daughters provide comparable care in many respects, but daughters are more likely to provide basic care (i.e., help with dressing, feeding and bathing) and sons are more likely to provide financial assistance defined as providing $500 or more within the past two years. Twenty-eight percent of women provide basic care, compared with 17 percent of men.
    For women, the total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $142,693. The estimated impact of caregiving on lost Social Security benefits is $131,351. A very conservative estimated impact on pensions is approximately $50,000. Thus, in total, the cost impact of caregiving on the individual female caregiver in terms of lost wages and Social Security benefits equals $324,044.
    For men, the total individual amount of lost wages due to leaving the labor force early because of caregiving responsibilities equals $89,107. The estimated impact of caregiving on lost Social Security benefits is $144,609. Adding in a conservative estimate of the impact on pensions at $50,000, the total impact equals $283,716 for men, or an average of $303,880 for male or female caregivers age 50+ who care for a parent.
    “These family caregivers, the celebrated members of the sandwich generation, are juggling their responsibilities to their own families and to their parents,” said Gail Hunt, president and CEO of the National Alliance for Caregiving. “There is also evidence that caregivers experience considerable health issues as a result of their focus on caring for others. The need for flexibility in the workplace and in policies that would benefit working caregivers is likely to increase in importance as more working caregivers approach their own retirement, while still caring for their loved ones.”
    “As the percentage of employees who are caregivers continues to grow, there will be greater demand on employers for help and support. There are many workplace resources and programs that can be made available that benefit all stakeholders since financial stress can negatively impact physical health and workplace productivity,” Timmermann said.
   The study contains implications for individuals, employers and policymakers. It points out that employers can provide retirement planning and stress management information and can assist employees with accommodations like flex-time and family leave. Individuals, it says, should consider their own health when caregiving and should prepare financially for their own retirement. Policymakers are made aware of the fact that more states are considering paid family leave, especially as it is accrued through workers’ compensation funds. On the federal level, a voluntary long-term care insurance program is part of the Affordable Care Act and will likely increase public awareness of the issue.
    The MetLife Study of Caregiving Costs to Working Caregivers provides updated information first reported in two MetLife studies: Sons at Work: Balancing Employment and Eldercare (2003) and The MetLife Juggling Act Study: Balancing Caregiving with Work and the Costs Involved (1999).

Methodology

    The study uses data from the Health and Retirement Study (HRS) conducted biannually by the University of Michigan with funding from the National Institute on Aging. First fielded in 1992, the HRS, a nationally representative sample, surveys adults over the age of 50 and provides extensive information on this population, including data on income, work and health status, and whether respondents provide basic, personal care and/or financial assistance to their parents. After cases with missing data were eliminated from the 2008 panel, the sample was restricted to 1,112 men and women who had a parent living.

Survey: U.S. Base Salary Increases on the Rise

   PHILADELPHIA - (BUSINESS WIRE) - 1/3/2011 - U.S. employees can expect median base salary increases of 2.8 percent in 2011, according to a new Hay Group survey released on Jan. 3. This compares to median actual base salary increases of 2.4 percent in 2010. Planned increases in 2011 are also at 2.8 percent for management/professional and support positions. Executives and skilled trade jobs come in slightly lower at 2.7 percent.   
   “Relatively speaking, a forecasted median 2011 base salary increase of 2.8 percent is good news for employees who, over the past two years, saw the lowest salary increases in decades,” Hay Group’s North American Reward Practice Leader Tom McMullen said. “Hay Group’s survey also points to a positive trend in organizational staffing. We found that the number of organizations increasing their staffing levels is double that of organizations that are decreasing their staffing levels.”
    Hay Group’s research also indicates that many of the cuts organizations have made to labor costs due to the recession have already happened. The percentage of organizations using or considering significant labor cost reduction items is considerably lower than data reported 18 to 24 months ago.
    The percentage of organizations using or considering the following labor cost reduction actions:

• Pay freezes: 18 percent
• Reduced retirement benefits: 17 percent
• Other reduced benefits: 15 percent
• Decreasing staffing levels: 10 percent
• Job sharing: 9 percent
• Furloughs: 7 percent
• Reduced working hours: 5 percent
• Salary cuts: 4 percent

    One exception to this trend is the continued emphasis on increasing employee co-pays and scaling back on employer paid coverage. Nearly 50 percent of organizations report either actual recent increases in employee co-pays (or reduced employer paid coverage), or that they are considering doing this in the near future.
    “Despite the optimism in our latest data, the contraction in the U.S. economy will not be reversed overnight, and neither will the return to the 3.5 percent to 4.5 percent base salary increases employees were used to receiving for much of the last decade,” McMullen said. “Along with modest base salary increases, we will likely see a continued emphasis on variable pay programs, both incentives and bonuses, as organizations emerge from the recession. Organizations are willing to pay for results, but only if they get those results.”
    An area of concern revealed in the data is the lack of differentiation in base salary increases between top performers and average performers. Top performers are reported to receive a median 3.1 percent increase versus the 2.8 percent increase reported for the typical employee.
    “Organizations have a difficult time differentiating pay increases when the pot of money gets smaller,” said McMullen. “Couple this with the ineffectiveness of many line managers in assessing employee performance and undifferentiated pay is the outcome. Managers have an opportunity to utilize their suite of ‘total’ reward programs – all of the financial and non-financial rewards that the organization provides – to reinforce the link back to individual and team performance.”
    Hay Group’s forecast results are based on the latest data available from Hay Group’s U.S. database, provided by 468 U.S. organizations in November 2010. Typical respondents to the survey include compensation professionals in the Human Resources departments of small to large size U.S. organizations across a wide range of industries. Hay Group’s core compensation database represents compensation practices for almost 3,000 companies and over 6 million employees.