More than a third of US organisations still feel they are in recession and not in a position to unfreeze pay, a survey says.
Even as the economy starts showing signs of life, a majority plan to remain conservative when it comes to pay practices in 2010, according to the WorldatWork 2009-10 Salary Budget Survey, January 2010 Update.
Of organisation who cut pay when the survey was first carried out back in October, 37% said they remained in a recession and were not yet considering recovery actions; 29% planned to restore pay in full, while 15% said the pay cuts were permanent.
As salary budgets remain tight and employee satisfaction low, organizations are turning to other ways to motivate and reward employees. Employers are focused on providing or enhancing career development opportunities (33%), non-cash rewards and recognition (28%), leadership training on employee motivation (21%), flexibility options (20%), monetary rewards for high performers (19%), and monetary rewards for mission-critical talent (15%).
“Employers are taking a ‘wait and see’ stance when it comes to returning to normal pay practice,” said Jim Stoeckmann, compensation practice leader at WorldatWork. “There are risks both ways. Moving too fast in restoring salaries and merit budgets leaves employers vulnerable if the recovery fails to materialize. Moving too slowly creates the risk of turnover as employees look for a better opportunity with another company. Even with jobs scarce, there are always opportunities for employees with the right skill set.”