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Even when you get a raise, it sometimes feels like you are not much further ahead once you factor in inflation and increased deductions for government benefits.
That’s why in communicating with their workforce many employers focus on “total rewards” offered including pay, benefits, work-life balance and career development opportunities. This information is typically conveyed in an annual “total rewards statement” which assigns a cost to each component of the program to remind employees of the true value of their compensation package.
The 2012 Total Rewards Pulse Survey of 60 companies conducted by McDowall Associates reveals that 63 per cent of private companies and 16 per cent of public/not-for-profit organizations have adopted a total rewards strategy with most of the rest planning to implement a similar program within the next three years.
I checked in with compensation consultants Tom Hellier (Towers Watson), Susan Hunter (Aon Hewitt) and Nigel Branker (Morneau Shepell) to find out what other compensation trends you can expect in 2013.
Here is what they told me:
1. Pay increases: Hellier says although zero pay increase budgets appear to be a thing of the past, employers are still cautious. Annual projections of 2013 pay increases in late 2012 released by several consulting firms and the total rewards association WorldAtWork show expected wage increases for 2013 of 2.8 to 3.2 per cent on average across Canada.
2. Hot markets: Companies operating in “hot markets” or seeking employees with “hot skills” will continue to wrestle with how to attract and retain the employees they need and still maintain internal equity across the organization, says Hunter.
As a result, Hellier notes that oil and gas companies in Western Canada will spend 30 to 50 per cent more on base pay salary increases than employers in other areas and industries, in spite of resulting “pay inflation” across the country for some jobs like engineers.
3. Pay for performance: Just because your company’s raise pool is three per cent, it doesn’t mean that you can expect the same increase in your pay cheque as the guy in the next cubicle. Branker says that’s because going into 2013 there is an even greater desire on the part of employers to differentiate and reward top talent.
Most organizations say they pay based on performance, but Hunter says their ongoing challenge is how to design pay programs that effectively link individual effort and rewards in an era of limited merit pay budgets.
The McDowall survey also asked participants what aspects of their total rewards programs were designed to address the needs of specific employee groups like baby boomers (born between 1946 and 1964); Generation X (born from early 1960s to 1980s); and, Millennials (born from early 1980s to early 2000s).
McDowall partner Liz Wright says that segmentation based on generational demographics was quite low in both the private (17 per cent) and public sectors (five per cent) but survey results show employers are more interested in developing total rewards programs specifically aimed at employees with critical skills.
Examples of programs used by survey respondents expressly targeting critically skilled employees are:
• Retention bonuses
• Succession planning, and
• Increased training and professional development opportunities.
Related: Average 2013 raises 3.2%: Survey
Sheryl Smolkin is a Toronto lawyer and writer. Contact her through her website and follow her on Twitter @SherylSmolkin.