By Rob Starr, Content Manager, Big4.com
Fifty-eight percent of executives say employee benefits costs are the leading factor impacting total reward decisions, according to the 2012-2013 Verisight and McGladrey Compensation, Retirement and Benefits Trends Survey. Consequently, employers are balancing the need to control costs with the desire to attract (47 percent) and retain (48 percent) key employees.
Companies responding to the survey indicate that they are looking closely at the competitive landscape when formulating their compensation philosophies. Base salary increases for salaried workers continued to edge upward in 2012, with an average increase of 2.6 percent including salary freezes. The anticipated 2013 salary increase of 2.7 percent is still a historically modest increase that reflects persistent unease regarding the economy, buffered by the need to retain key employees critical to future success. Increases were highest among service, finance, banking and insurance companies and lowest for the economically harder-hit construction and real estate sectors.
When it comes to evaluating retirement plans, costs of investments (59 percent), costs of services (57 percent) and quality of service (53 percent) continue to be the major factors influencing decision making. As employers strive to attain appropriate investment diversification without overwhelming their participants, providing choices to employees remains paramount. Half (51 percent) of the employers surveyed offer 11-20 plan investment options. Mutual funds are still the most common investment type and are offered by 92 percent of retirement plans.
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