According to a recent study by the Wilson Group, Concord, MA, and the Bose Corporation, New England companies are expecting modest growth in their business. Seventy-one percent (71%) of companies recently surveyed expected growth exceeding 4% in 2015; this compares to only 55% for 2014 actual growth. Plus 50% of companies surveyed are planning to increase their staffing levels and 37% are planning no change in staffing for 2015; only one company in the survey indicated they were facing layoffs or staff reductions.
The survey, “Total Compensation Planning: Review of 2014 – Projections for 2015” was conducted in November, 2014 and was sponsored by the BOSE Corporation and the Wilson Group. It includes survey responses from 57 leading New England companies such as Constant Contact, Dana-Farber Cancer Institute, Eastern Bank, iRobot, and TJX. The survey is available at the Wilson Group website (www.wilsongroup.com).
The jobs with the highest hiring challenges are professional level positions in Information Technology, Engineering, and Sales and Marketing. “This is not surprising given the knowledge based economy that characterizes New England market” says Tom Wilson, President of the Wilson Group.
“Merit pay increases are likely to be the same in 2015 as in 2014” stated Wilson. The projected pay increase averages 3.0% for both years. “But, the number of people not receiving a pay increase will be slightly higher in 2015 than 2014,” says Wilson. The report sited that 4.5% of employees didn’t receive a pay increase in 2014 and 5.0% are not likely to get one in 2015 in these companies.
Bonus plans will continue to be a major element of compensation and virtually all companies in the survey have these performance incentive plans. Over 88% of these companies reported making bonus payouts in 2014. The average payout will be a little less than the target payout, with the median payout at 90% of the planned amount. The range of payouts for most companies fell between 47% of the target and 130% of the target for exceptional performance.
“Few companies are planning any major changes to their stock/equity plans,” says Wilson. “Seventy-seven percent (77%) are planning just normal updates, and some are developing new guidelines for awards given the migration from stock options to restricted stock.” Companies are changing the performance measures with bonus plans to reflect more emphasis on revenue growth and customer satisfaction. “As the market heats up for talent, New England companies are ready to link rewards more closely to performance and to use a variety of tools to accomplish this,” concludes Wilson.