The Bureau of Labor Statistics reported that the nation’s unemployment rate dropped to just over 8 percent as of April 2012. Though the unemployment rate seems to be on a slow yet steady decline, pay increase budgets are idling.
The Compdata Surveys 2012 Compensation Data Insurance survey results reported pay increase budgets at 2.8 percent, reflecting no change since 2010. Pay increase budgets are projected to slightly increase next year, hitting 3 percent for the first time since 2009.
“Pay increase budgets have stagnated for a number of industries, and insurance companies are no exception,” says Amy Kaminski, director of marketing for Compdata Surveys. “Until it is clear how healthcare reform will ultimately affect insurance providers, employers in the industry will likely continue to take a guarded approach to offering increases.”
Pay increase budgets are used to make different types of adjustments to employees’ salaries, the survey notes. Eighty-eight percent of insurance organizations report using pay increase budgets for merit increases. More than 36 percent offer promotional increases, while 25.9 percent use pay increase budgets for market adjustments. Only 4.1 percent of organizations use pay increase budgets to implement cost-of-living adjustments.
Pay increase budgets by region Pay increase budgets vary slightly by region. Insurance organizations in the East and South each report pay increase budgets of 3 percent. Companies in the West follow at 2.8 percent, with insurance employers in the Midwest reporting the smallest pay increase budget, 2.6 percent.
Projected budgets for 2013 are fairly consistent across all regions as well, with companies in the East and West reporting a projected budget of 3.1 percent. Insurance organizations in the South are projecting 3 percent pay increase budgets in 2013, compared to companies in the Midwest, at 2.8 percent.
Compensation Data 2012 Insurance provides a comprehensive summary of pay data, benefits information and pay practices with an effective date of January 1, 2012. More than 100 industry-specific job titles and 400 benchmark titles were surveyed, ranging from entry-level to top executives, with data collected from more than 1,900 insurance employers across the country.
For more information about the compensation and benefits surveys, contact Michelle Willis at 800-300-9570.
By Ayo Mseka