Business Survey Results Regarding Employee Compensation

Published:

by Larry Greenwalt, CPA, Managing Partner

In our recent Business Intelligence Survey, 68% of the respondents reported reducing employee pay, hours or benefits in the last 18 months (43% of not for profit respondents, 75% of manufacturing and distribution respondents, 83% of service and professional respondents, and 100% of construction respondents), as follows:

  • Pay cuts of 1-10% – 9% of responses
  • Pay cuts of more that 10% – 3% of responses
  • Pay was frozen – 36% of responses
  • Hours were reduced – 21% of responses
  • Suspended or reduced 401k match – 18% of responses
  • Health insurance contributions reduced – 6% of responses
  • Reduced other benefits – 6% of responses

Only 60% of the respondents indicated that they either have reinstated, or plan to reinstate, some or all of the reductions noted above. The most frequently identified triggering events that would cause reinstatement were: 1) increased revenue, 2) increased profitability, 3) being “right sized” and improving margins, and 4) improved economy.

Surprisingly, 72% of the respondents do not plan to grant raises in the near term, and of those that said they would grant raises, 60% said raises would be in the 1-2% range and 40% indicated raises would be in the 3-4% range. 72% of respondents indicated that raises would be equally allocated among all levels/classes of employees, and 28% indicated the largest percentage increase would go to factory, warehouse and office staff.

It appears that Indiana organizations are still very cautious and concerned about controlling labor costs and do not feel they have experienced a sufficient economic turnaround in order to return to pre-recession compensation practices.

We hope that this Business Intelligence Survey was of interest to you. Our goal is for these surveys to be timely, take very little of your time, and to have a quick turnaround. If there is another current business hot topic that you would like to see a survey on, please contact me with your suggestion.