Median base salaries are expected to tick up 3 percent this year, according to research released Monday by Hay Group, a management consulting firm. However, if you factor consumer price index growth, employees will only see a 0.8 percent net gain.
For an employee making $35,000 a year, that’s a subtle $23 more per paycheck.
But as I always say, a raise is a raise, and it should be appreciated. Yet, judging by the latest figures on employee retention and morale, a modest salary increase is only a fraction of the effort needed to keep employees happy – and more importantly, keep them loyal.
“With the economy continuing to grow slowly, it is not surprising that salary increases have followed suit,” says Jeff Blair, Hay Group’s U.S. Productized Services Leader. “Relatively low annual salary increase budgets are limiting the financial rewards available to employers. As a result, organizations are increasingly focused on improving employee engagement and creating a positive work climate for employees.”
Lately, it seems employers understand that the promise of a raise isn’t their most seductive feature. When they're on the job hunt, according to a survey by Monster.com and Unum, would-be employees prioritize finding a "caring company, fulfilling work and better benefits over dollars and cents." From telecommuting options to unlimited vacation days, employers have to mix traditional benefits concepts with outside-the-box offerings.
Our own parent company just sent an email this week informing us that we’ll be allowed to take early Fridays if we’re willing to cut time from our lunch breaks. That’s a gesture employees like to see, according to the Society for Human Resource Management, which did a study on the most coveted summer benefits. Behind a flexible schedule, leaving work early on Friday is a perk that nearly 30 percent of employees want.
Some companies are willing to be even more generous if it means they get to lure top talent. That’s been most apparent in tech and health sectors, where skilled employees are in demand. Just look at GoHealth, a health plan comparison resource that was recently named one of the best employers in Chicago. Last year, they started offering employees unlimited paid vacation days, flex Fridays and a gym membership subsidy.
Here’s another example, although a bit more radical: At FullContact, a Denver-based tech company, employees are being paid $7,500 to take a vacation. In order to get the money, workers have to take the vacation and disconnect—they can’t work while they’re traveling.
Even the 30 percent of employees who contact work while on vacation wouldn't turn down that offer.
In this challenging economy, rethinking the value of certain benefits is necessary to keep up with evolving work forces. For many employers, it's not always going to be how much you can pay, but whether you can adapt.