Hewitt Expects 3.8% Increases; Execs Reported 7.6% to ExecuNet

Published on: Wednesday, October 31, 2007       Comments (0)       Category: Finance,  Leadership,  Sales & Marketing, 

Human resources consultants Hewitt Associates’ survey of 1,007 large organizations indicates base salary raises will be nearly flat in 2008 — 3.8 percent compared to 3.7 percent in 2007 and 3.6 percent in 2006.

The jackpot for many employees, according to Hewitt, will be in variable pay plans, which can push salaries beyond the expected 3.8 percent increase. Sixty-three percent of the surveyed companies offer special recognition awards to employees; 59 percent have a business incentive program; 44 percent grant individual performance awards; 44 percent offer non-executive equity awards; and 38 percent give retention bonuses to employees.

While Hewitt’s research focused on non-executive salaried exempt employees, ExecuNet’s ongoing analysis of executive compensation issues found that those who were directors and above in organizations expected to receive 7.6 percent increases in 2007, and those at the highest level — CEO and President — awaited 10.2 percent raises.

Executives who change roles expect to fare the best in compensation increases — 17.5 percent — and even those who are not in active job search expect their next opportunity to be worth 21 percent more than their current position.

Variable pay plans are the norm in the executive suite; corporate recruiters reported to ExecuNet that 84 percent of executives are being offered performance bonuses — up from just 50 percent in 2006. And search firm professionals are also negotiating performance reviews after six months for 44 percent of executive placements, nearly doubling since 2006.

Read more compensation analysis and insight about executive issues in ExecuNet’s 15th annual Executive Job Market Intelligence Report.