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Pay raise requests increasing: Is your company prepared?

By December 2, 2014January 16th, 2023No Comments

As the economy expands and more workers are confident in their job security, employees are taking the initiative to ask for pay raises. With compensation strongly tied to job satisfaction, employers should pay attention to these requests as they are becoming more frequent and could boost worker engagement and productivity.

A survey by Accountemps highlighted the rise of compensation hikes, with more than 4 in 10 chief financial officers saying the number of requests for raises or promotions is higher than it was two years ago. The increase in workers asking for advancement in their careers or compensation is a sign that the economy is stabilizing. Since the economy is experiencing growth and seeing higher employment rates, more employees are leaving their current jobs to pursue other opportunities. The accounting and finance professional staffing firm cited a report from the U.S. Bureau of Labor Statistics that found workers are quitting their jobs at the highest rate in six years.

With the risk of their top talent exiting the company, employers should focus on adjusting their compensation programs to adequately provide pay for workers depending on their performance.

A survey from human resources firm Aon Hewitt said national salaries will increase to 3 percent in 2015, up from 2.9 percent in 2014. With the 2015 rise in compensation representing a seven-year high in pay raises, companies are exploring various options for properly rewarding their workers, including bonuses.

Higher bonuses could help further company mission
With incentive compensation like bonuses, companies can recognize and reward employees who achieve business goals and further the firms’ missions. The Aon Hewitt report found that 91 percent of companies give bonuses to employees.

As companies are looking to restructure their incentive compensation programs, Accountemps recommends firms offer greater bonuses.

Bonuses are accounting for a larger portion of company payroll budgets with this type of compensation, representing 12.7 percent of total payroll funds – an all-time high in the 38 years of the survey’s history, according to Aon Hewitt.

“Employers must be proactive and closely scrutinize compensation levels to stay competitive and keep good staff,” said Bill Driscoll, a district president with Accountemps, in a related news release. “It’s better to be prepared than surprised by an employee’s request for a raise or promotion. Now’s the time to proactively connect with key team members to identify advancement opportunities and discuss viable career paths.”

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Ballast Point Ventures

Ballast Point Ventures is a later-stage venture capital fund established to provide expansion capital for rapidly growing, privately owned companies in diverse industries, with a particular emphasis on companies located in Florida, the Southeast, and Texas. The BPV partners have more than 70 years of combined experience investing in and building high-growth companies in a number of industries, including healthcare, business services, communications, technology, financial services, and consumer goods. BPV has $200 million under management and seeks to make equity investments ranging from $3 million to $10 million.

Harbert Management Corporation

Harbert Management Corporation seeks to generate superior returns for their investors by identifying and investing in the most promising early growth stage companies in the Southeastern U.S. HMC seeks to capitalize on what it believes are compelling regional dynamics, such as a strong and fast-growing economy, significant research and development activities, and an established entrepreneurial community. The HMC team combines substantial investment, advisory, and operating experience with capital and networking contacts to support great entrepreneurial teams in successfully executing their growth plans. With offices in Birmingham, Alabama; Richmond, Virginia; and Gainesville, Florida, it’s well positioned to partner with entrepreneurs throughout the Southeast.

KBH Ventures

KBH Ventures was an early investor in Iconixx Software. KBH's investment philosophy plays a significant role in the firm's successful track record. KBH believes in running businesses to be cashflow positive and profitable every month. Startups and companies in a startup mode, such as one that has been purchased in distress, are expected to generate revenue within the first six months and reach profitability within the first 12 to 18 months. KBH also only invests in or acquires companies that are in the startup phase or have less than $20 million in revenues. KBH targets technology companies that offer business-to-business services.

S3 Ventures

S3 Ventures is an early expansion and growth stage venture firm with $200 million under management. It’s focused on information technology solutions that solve large business problems. S3 also invests in medical devices that improve the human condition. S3 invests in category-defining opportunities. It partners with the team and help focus methodically on what it takes to build a successful company. S3 today helps talented entrepreneurs take their technology and market knowledge and form valuable businesses in a repeatable fashion. Investment sizes start at several million or more for Series A, B, and C financing.