Mercer’s US Compensation Planning Pulse continues to show employers not deviating from typical practices

In June’s version of the US Compensation Planning Pulse survey, participants were asked about how they are handling other compensation management decisions, beyond annual base pay increases. Their response—to simplify, is that it’s business as usual. In terms of salary structure adjustments, sales incentives, and long-term incentives, the economic impact of COVID-19 really hasn’t changed how the majority of organizations make decisions.

Structure Adjustments

While 65% of the 648 participating organizations have yet to start planning for 2021, along with distributing annual increases as planned, they also adjusted their structures upward as they would in any other year. We continue to hear that most companies have a formal salary structure that they adjust every year. While there is some variation amongst industries, the national average salary structure adjustment was reported as 2.3%.

Sales Incentives

One topic that a lot of us are talking about is how to treat sales professionals. With many companies not expected to meet their sales and revenue goals due to the widespread economic downturn, should we be adjusting sales incentive plans to minimize the impact on sales professionals? After all, it’s not the sales person’s lack of hustle that’s causing them to miss targets.

Well, it turns out that most companies do not feel like adjusting sales incentive plans is necessary. Of those companies that reported having sales incentive plans (50%), approximately three-quarters of them said they did not make any changes to sales quotas/goals for the majority of their population, nor have the majority adjusted the total pay mix or even base pay for sales professionals.

This may be a very tough year for many sales professionals.

Long-term Incentives

Guess what? The majority of respondents indicate that they granted long-term incentives (LTIs) as planned prior to the onset of COVID-19. (As we’ve discussed previously, the timing of increases and rewards for companies on a calendar year financial plan played a part in why we saw little disruption. Typically, those companies making grants do so during the first quarter.) Even further, 70% of the companies who reported currently using LTIs as part of their rewards package do not intend to make any changes to their grant practices or guidelines for 2021.

Stay Tuned

In the next version of the US CPS Pulse survey we will be asking about turnover, non-monetary recognition, and any allowances or reimbursements organizations are providing for remote working. We do also expect to see an increase in the amount of participants planning for 2021 so will be asking about projected salary increase budgets.

Results are provided free of charge to participants—get the info you need to plan for 2021! Have questions? We’re here to help; call 855-286-5302 and speak to one of our representatives.