At this time of year, we have several clients working hard to determine what adjustments they are budgeting as far as pay increases for their employees. Between 2008 and recent years, many organizations were not in a position to provide increases due to the weak economy. With a couple years of growth and improved bottom-lines, employees are saying, “Show me the Money!” They want to see increases in the areas of merit, cost of living, market pay for those employees under market midpoint, longevity, bonus, certifications, 401(k), etc. Employee pay has been frozen for the most part, benefits such as 401(k) contributions had been suspended, and the increased cost of health insurance has been passed on to the employee. The most valuable asset lost its status during the recession years. Employees are telling employers that enough is enough and want to see the increases in their pay like they enjoyed in the pre-recession years.
Our clients have come to us over the past 42 years (Johanson Group, HR/Management Consulting established in 1973) and the past 10 years (DBSquared, HR software) to assist them in determining how best to pay their employees with the resources that they have to work with. Whether an organization was large or small, the employees agreed during the recession that their pay increase would be small or none, but that period of time has come and gone.
We are currently working with a municipality that didn’t provide any increases over the past several years, and when we recently completed their market analysis and set their pay ranges using our DBCompensation software program (job descriptions, job point ratings, employee data and market data), they were 20% behind market. We worked with the leadership team and City Council to formulate a pay plan over the next few years that will help them to make up that deficiency as well as keep their pay range structure current with market. With this plan in place, the employees will spend less time thinking “Show me the Money!” and will start spending more time being engaged and committed to make a difference for their organizations.