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Salaries Survey indicates this year’s pay raise may be next year’s pay cut

The good news is, merit pay raises for companies offering them are averaging 4.6 percent, according to a salary survey done by the San Diego Employers Group and the Epler Co.

The bad news is, some of those companies shelling out actual raises this year apparently are thinking of cutting back next year.

The survey found 169 firms, or 59.5 percent of the total firms responding to the survey, budgeted merit pay raises this year.

For next fiscal year, 135 companies , 47.5 percent , said they would set aside merit pay in their budgets.

The average merit raise this year for exempt or salaried employees was 4.6 percent; for non-exempt or hourly employees, it was 4.4 percent.

The findings on the merit increases weren’t any surprise to Bob Grove, vice president of the Employers Group, representing about 1,200 local employers.

“The average merit pay increase over the past five years has been fairly consistent, falling in a range between 4 and 4.5 percent,” he said.

For those who happen to be working in a skilled high-tech job obtained through a headhunter, there likely is something bigger.

“High-tech companies seem to be giving a little more because of the nature of their getting and keeping those people who are difficult to find,” Grove said.

While merit pay is appreciated, those receiving bonuses and commissions are likely seeing hefty increases to their overall compensation. For example, the survey found the average pay for a CEO was nearly $204,000, but for those awarded bonuses, the average was 30 percent of the salary, meaning they received an extra $61,000 last year.

There’s a noticeable drop-off in bonuses among non-exempt employees. A general clerk who earned an average of $9.87 an hour isn’t likely to get one. Only seven of 38 firms responding to the survey said general clerks were eligible for a bonus, and if they did get one, the average was a mere 4 percent of their base pay. That means for the annual $20,530 they earned, those lucky clerks received an additional $821.


A Popular Incentive

Grove said while bonuses and commissions have been part of management compensation packages for a long time, more companies are using them both as an incentive for improved work performance and to keep them separate from the company’s overall salary budget.

“More companies are using bonus pay to reward employees or a team of workers for going above what’s expected, such as getting a product out by a certain deadline or finishing a project ahead of schedule,” he said.

Indeed, the concept of performance bonuses has even taken hold in government, where management and employees for the county are eligible for the extra pay.

Participants in the 2001 salary survey included 284 local firms covering 11 different areas: executive; accounting/finance; human resources; information systems; legal; support functions; manufacturing; materials management; quality assurance; engineering; and sales, marketing and service.

Besides separating pay scales by industry, the survey also broke down the salaries according to size of a company based both on number of employees and revenues.


Size Matters

Not surprisingly, the larger the company, the bigger the paycheck handed out. A CEO overseeing more than 500 workers is averaging an annual salary of about $340,000, but they might also get an average bonus of 42 percent on top of that.

On the flip side, telemarketers are paid an average of $12.68 hour.

Some of those supposedly highly paid, high-tech jobs actually don’t pan out so well, according to the survey. For example, the average pay for a Web designer is $49,338; for a network administrator, it’s $53,132.

Those in engineering, however, still are handsomely rewarded. Senior software/systems engineers are averaging $88,683 per year; senior manufacturing engineers, $71,541; and electrical engineer managers get $98,739.

Those wishing to obtain a copy of the survey should be prepared to pay $350 unless they’re members of the Employers Group, who will be charged $200.

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