As the year comes to a close, companies are finalizing their 2020 salary budgets. Some factors impacting salaries are new FLSA overtime rules, changes to the minimum wage in some states, and market pressure to attract talent. The national increase in base pay is expected to remain at around 3 percent. However, many companies report much higher budgets for bonus/incentive pay. Here are six compensation trends to watch in 2020:
Many employers believe that they can forbid discussions about pay among their workers, but this isn’t true. Unlike older workers, millennials are comfortable talking about pay with their peers. They also have access to accurate compensation information from numerous websites. HR and managers need to be more transparent with employees about how much the company pays, and what the criteria are for increases and bonuses.
Lockstep pay grades were common when people did the same job for many years. Today, job requirements and responsibilities change rapidly. Many companies have moved toward variable pay with incentives and increases based on performance. Rewards can be paid on the organization or department’s success, as well as individual performance. Compensation plans tied to performance need clear parameters to avoid misunderstandings.
In smaller organizations, many workers wear multiple hats. Hybrid roles have evolved out of necessity or as a result of workers developing new skills. Sales/Account Management or Office Manager/HR are just some examples of hybrid roles. These employees should be compensated based on the amount of responsibility added for each new role.
Portfolio of Skills
Many younger workers take a portfolio approach to their careers. They want to add experiences, skills and development opportunities to their repertoire. Whether it’s a new software program or an industry designation, constant training benefits both the employee and the organization. Once workers gain a new skill, they expect to utilize it and be paid accordingly.
More Frequent Bonuses
Instead of a lump-sum annual bonus, a growing number of companies are doling out rewards all year. Some workers may receive a quarterly bonus. Others may receive a bonus after a project wraps up. Managers are also using different types of rewards to recognize high performers. Spot bonuses, team bonuses, individual incentives, and recognition have all seen an increase in corporate America.
Total Rewards Package
Leading-edge companies aren’t just offering competitive base salaries, but a total rewards package. Total Rewards is a relatively new term, and it includes everything an employee can expect to get from an employer: salary, development opportunities, promotions, incentives, workplace flexibility, recognition, interesting work, and a competitive benefits package.
The experienced professionals at The Daniel Group can help with all your staffing needs from entry-level to seasoned experts. We have a proven track record of finding and qualifying the best candidates, and we can find the right talent to fill your company’s needs. The Daniel Group stands behind our work with a One-Year Replacement Guarantee.