2010 Benefit & Salary Trends
With the recession still fresh in the everyone's minds, many employers are struggling to develop policies for raises and benefits in 2010. While employers realize that competitive benefits and salaries are essential for recruiting and retaining top talent, cost containment remains a top priority for many U.S. employers.
Salary freezes reached a remarkable high in 2009. "When they were looking ahead to 2009, employers planned salary increases of around 3.9 percent, but they gave increases of only 2.1%," said Joseph Kilmartin, managing director of compensation consulting at Salary.com. "I've been in the business 40 years and I've never seen this before" (John Rossheim).
2010 brings with it good news for many U.S. employees--the rebound of the pay raise. Raises are expected to bounce back after being stifled by last year's recession. Although it looks as though the worst is behind us, employers are approaching payroll cost increases with extreme caution. However, this year, fewer companies are planning to eliminate raises altogether. A recent Watson Wyatt (a human resources consulting firm) survey showed only "10% of 900 companies polled are planning no pay raises for workers in 2010, compared with 25% this year" (CNNMoney.com).
Watson Wyatt polled 235 large U.S. employers in May 2009 and concluded that on average, companies are planning a 3% raise in 2010 (CNNMoney.com).
Other salary trends
The rising cost of healthcare and the impact of last year's recession have left workers expecting higher costs for employer sponsored healthcare benefits.
2009 Staying@Work Report by Watson Wyatt
Trends for 2010:
Wellness initiatives being started by many U.S. companies involve providing incentives for employees to participate in programs such as health risk assessments, smoking cessation (the most popular), weight loss/fitness, blood pressure control and even diabetes management. Incentives include gift cards, lower premiums and even cash.
In 2009, 8% of companies dropped their 401K matching programs, however, plan to restore them again in 2010.
According to Employee Benefit News, "about half the U.S. labor force (75 million workers) lacks access to an employer-sponsored retirement plan, and Americans on their own don't save enough for either retirement or financial emergencies" (Nadler). This is why President Obama may impose a mandatory automatic IRA under his new 2010 budget. If this legislation passes, all businesses must automatically enroll all employees in their retirement or savings plan. For more information, visit this site: http://ebn.benefitnews.com/news/coming-soon-to-a-workplace-near-you-a-mandated-automatic-ira-2682211-1.html.
Sources of Information:
Hitting the Target with Wellness Communication. Posted on November 30, 2008 by admin in Wellness & Health Promotion http://blog.hopehealth.com/?p=20
Koster, Kathleen. More benefits needed to ease economy's toll on worker health. Posted December 2, 2009. http://ebn.benefitnews.com/news/more-benefits-needed-to-ease-economys-toll-on-worker-health-2682592-1.html. Site accessed December 2009.
Miller, Stephen. SHRM.org. Open Enrollment: Six Benefit Trends for 2010. Posted September 24, 2009. http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/sixbenefittrends.aspx. Site accessed December 2009.
Miller, Stephen. SHRM.org. Size and Scope of Wellness Incentives Grow Larger. Posted August 4, 2009. http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/WellIncentives.aspx. Site accessed December 2009.
Nadler, Mark. Coming soon to a workplace near you: A mandated automatic IRA. Posted November 1, 2009. http://ebn.benefitnews.com/news/coming-soon-to-a-workplace-near-you-a-mandated-automatic-ira-2682211-1.html. Site accessed December 2009.
PriceWaterhouseCoopers. Behind the numbers: Medical cost trends for 2010. http://www.pwc.com/us/en/healthcare/publications/behind-the-numbers-medical-cost-trends-for-2010.jhtml. Site accessed December 2009.
ResumeBear. College Class of 2009 Holds Ground With Average Starting Salary Offer. Posted on July 17, 2009. http://www.resumebear.com/blog/index.php/2009/07/17/college-class-of-2009-holds-ground-with-average-starting-salary-offer. Site accessed December 2009.
ResumeBear. Pay Raises Expected to Rebound in 2010. Posted July 21, 2009. http://www.resumebear.com/blog/index.php/2009/07/21/pay-raises-expected-to-rebound-in-2010. Site accessed December 2009.
Rooney, Ben. CNNMoney.com. Pay raises will be bigger - next year. Posted July 23, 2009. http://money.cnn.com/2009/07/22/news/economy/pay_raises/index.htm. Site accessed December 2009.
Rossheim, John. Will Salary and Benefits Trends Shift in 2010? http://hiring.tampabay.monster.com/hr/hr-best-practices/recruiting-hiring-advice/managing-hiring-costs/salary-trends-2010.aspx. Site accessed December 2009.