How Are Organizations Utilizing Retiring Baby Boomers’ Compensation?
One of our public clients has experienced 17% turnover during the first eight months of 2018. The average tenure of the employees leaving this organization is almost 5.5 years and a measurable group of these employees are retiring baby boomers.
The average pay variance between the new hires and terminated employees for the above mentioned client is 16.7% or about $6,365 dollars per employee. With the impact of daily baby boomer retirements, we estimate that organizations will have between 10% and 25% in total compensation dollars to reallocate within their annual employee compensation budgets.
For small to large organizations, the amount of freed-up dollars associated with baby boomer terminations due to retirements can be significant and useful for taking care of high priority compensation needs. Some of these needs will include new hire replacements, funding variable pay incentive plans, addressing pay compression and pay inequity issues, bonus pay for top performers and a variety of other pay initiatives.
For organizations with remaining baby boomers that will retire in the next three to five years, how will you plan to use their 4th quartile base pay salaries to fund other compensation needs?
Learn more by visiting www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-ty/.