With the employment outlook improving in the US, employers are focusing their compensation programmes on hiring and retaining top talent, according to a survey by Buck Consultants.
According to a study titled 'Reviving and Inspiring the Workforce: 2011 Compensation Trends Survey', employers are using hiring bonuses to attract talent and retention bonuses to keep them.
A hiring bonus is an extra amount of money provided at time of hire as an incentive to an applicant to accept a job offer.
The survey found that nearly two-thirds of organisations are using or planning to use hiring bonuses and 41% use or expect to implement retention bonuses.
For those employees participating in a bonus programme, the study found that eight out of every 10 employees can expect to receive a payout in 2011. About 44% of respondents expect to pay bonuses that are larger than last year.
"During the economic downturn, many employers reduced staff and asked remaining employees to do more with less. As the job market improves, these organisations are using tactics such as employee referral bonus programmes to not only attract proven performers, but also help retain the employees who make referrals," Buck Consultants Director Kathi Myers said.
"Involvement in the hiring process engages employees and strengthens their ties to the organisation," Myers added.
Besides, employers are planning to implement several strategies to engage their workforces such as career development opportunities for employees, market pay adjustments, larger increase in base salary and more non-cash recognition.
The use of employee referral bonuses has also gone up in the past six months to 66%, compared to 59% in mid-2010, the survey noted.
As employers become more confident in the improving economic environment, pay freezes are thawing and median pay increases are expected to rise to 3% this year, similar to levels seen immediately prior to the recession, and up from 2.7% in mid-2010 and 2.2% at the beginning of 2010.
Further, only 9% of employers still have pay freezes in place, down from 48% in mid-2010 and 64% at the beginning of 2010.
In fact, 75% of respondents said they did not take any special actions such as layoffs, hiring freezes or bonus suspensions in the last 18 months to control or reduce labour costs.
Instead, employers have invested in programmes that will produce the best return the attraction and retention of key talent.
The survey which was conducted in February among 100 employers.
