According to a recent study by Wilson Group, Concord, MA, and Bose Corporation, New England companies are expecting modest growth in their business. Sixty-two percent (62%) of companies recently surveyed expected growth exceeding 4% in 2017; this compares to only 44% for 2016 actual growth. Plus 43% of companies surveyed are planning to increase their staffing levels and 41% are planning no change in staffing for 2015; this shows that employment is likely to remain strong in 2017 and the competition for talent will intensify.

The survey, “Compensation Planning for 2017” was conducted in November, 2016 and was sponsored by BOSE Corporation and Wilson Group. It includes survey responses from 58 leading New England companies such as TJX, iRobot, Hubspot, Mathworks, Dana-Farber Cancer Institute, New Balance, Harvard University, and DentaQuest. The survey report can be purchased here.

The jobs with the highest hiring challenges are professional level positions in Information Technology and Engineering. “This is not surprising given the knowledge based economy that characterizes the New England market” says Tom Wilson, President of Wilson Group.

“Merit pay increases are likely to be the same in 2017 as in 2016” stated Wilson.  The projected pay increase averages 3.0% for both years. “But, the average number of people not receiving a pay increase will be lower, so more people will be getting raises. This shows the market for talent is getting stronger,” says Wilson. The report sited that an average of 11.4% of employees didn’t receive a pay increase in 2016 and 6.4% are not likely to get one in 2017 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 80% of these companies reported making bonus payouts in 2016. The average payout will be on target of what the company planned, with the median payout at 100% of the planned amount.  The range of payouts was at a low end of 50% of plan payout to 120% of the target payout 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.

For “hot jobs” where attracting and retaining are most challenging, companies are employing sign-on bonuses, expanding training and mentorship programs, and selectively using retention bonuses.  “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.