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May 19, 2015
Employee Remuneration Trends in 2011/12 Aon Hewitt | United Kingdom
John PuddephattPrincipal Benefits ConsultantTel: +44 (0)788 940 6624
Nishant MahajanMarket Intelligence ExpertTel: +44 (0)207 086 9184
Andrew MacLeodEMEA Reward Data Services LeaderTel: +44 (0)207 086 9181
Cheryl HinmanSenior Executive Compensation ConsultantTel: +44 (0)207 086 9138
Nikki SeversSenior Global Rewards ConsultantTel: +44 (0)117 900 4435
Aon Hewitt Speakers
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Agenda
• Aon Hewitt Total Reward Survey Methodology
• Key Economic Indicators
• Salary Increases & Budgets
• Bonus Awards
• Long-Term Incentive Trends
• Employee Benefits
• 2012 Reward Outlook
• Aon Hewitt 2012 Survey Calendar
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Survey Methodology – Aon Hewitt’s CareerLink Framework
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Economic Indicators
Source: Office for National Statistics
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-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
2007 2008 2009 2010 2011 2012
CPI Inflation GDP Unemployment
-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
2007 2008 2009 2010 2011 2012
CPI Inflation GDP Unemployment Actual Salary Budgets Projected Salary Budgets Real Increase/Decrease
Salary Increase Trends
Source: Aon Hewitt’s Global Salary Increase Survey and Office for National Statistics
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-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
2007 2008 2009 2010 2011 2012
CPI Inflation GDP Unemployment Actual Salary Budgets Projected Salary Budgets Real Increase/Decrease
Salary Increase Trends
Source: Aon Hewitt’s Global Salary Increase Survey and Office for National Statistics
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-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
2007 2008 2009 2010 2011 2012
CPI Inflation GDP Unemployment Actual Salary Budgets Projected Salary Budgets Real Increase/Decrease
Salary Increase Trends
Source: Aon Hewitt’s Global Salary Increase Survey and Office for National Statistics
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-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
2007 2008 2009 2010 2011 2012
CPI Inflation GDP Unemployment Actual Salary Budgets Projected Salary Budgets Real Increase/Decrease
Salary Increase Trends
Source: Aon Hewitt’s Global Salary Increase Survey and Office for National Statistics
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Source: Aon Hewitt Global Employee Engagement Database
Key Engagement Drivers – Reward is Vital
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Driver Name Global * Asia-Pacific Europe Latin America North America
Career Opportunities 1 1 1 1 1
Brand Alignment 2 2 3 3 4
Recognition 3 3 5 2 5
People/HR Practices 4 5 2
Organisation Reputation 5 3
Managing Performance 2
Pay 4 4 4
Valuing People/ People Focus 5
* Ranking of drivers based on percentage of time the driver appear as one of top 3 opportunity areas in the organisation
Base Salary Increases from 2010 to 2011 (Constant Incumbent & Constant Company Comparison)
0%
1%
2%
3%
4%
5%
6%
7%
Level 11 Level 10 Level 9 Level 8 Level 7 Level 6 Level 5 Level 4 Level 3 Level 2 Level 1
Lower Quartile Median Upper Quartile
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2010 vs
2011 Average Salary Increases (By Industry Sector)
0%
1%
2%
3%
4%
5%B
anks
/ Fin
anci
al S
ervi
ces
Con
stru
ctio
n/ E
ngin
eerin
g
Con
sum
er P
rodu
cts
Ene
rgy
Info
rmat
ion/
C
omm
unic
atio
n/
Tech
nolo
gy
Man
ufac
turin
g -A
eros
pace
/ A
utom
otiv
e/ In
dust
rial
Med
ia/ E
nter
tain
men
t
Pha
rmac
eutic
al/
Bio
tech
nolo
gy/ H
ealth
care
Rea
l Est
ate
2011 2010
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2010 vs
2011 Average Salary Increases (By Industry Sector)
0%
1%
2%
3%
4%
5%B
anks
/ Fin
anci
al S
ervi
ces
Con
stru
ctio
n/ E
ngin
eerin
g
Con
sum
er P
rodu
cts
Ene
rgy
Info
rmat
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C
omm
unic
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n/
Tech
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gy
Man
ufac
turin
g -A
eros
pace
/ A
utom
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e/ In
dust
rial
Med
ia/ E
nter
tain
men
t
Pha
rmac
eutic
al/
Bio
tech
nolo
gy/ H
ealth
care
Rea
l Est
ate
2011 2010
13
2010 vs
2011 Average Salary Increases (By Industry Sector)
0%
1%
2%
3%
4%
5%B
anks
/ Fin
anci
al S
ervi
ces
Con
stru
ctio
n/ E
ngin
eerin
g
Con
sum
er P
rodu
cts
Ene
rgy
Info
rmat
ion/
C
omm
unic
atio
n/
Tech
nolo
gy
Man
ufac
turin
g -A
eros
pace
/ A
utom
otiv
e/ In
dust
rial
Med
ia/ E
nter
tain
men
t
Pha
rmac
eutic
al/
Bio
tech
nolo
gy/ H
ealth
care
Rea
l Est
ate
2011 2010
14
2010 vs
2011 Average Salary Increases (By Industry Sector)
0%
1%
2%
3%
4%
5%B
anks
/ Fin
anci
al S
ervi
ces
Con
stru
ctio
n/ E
ngin
eerin
g
Con
sum
er P
rodu
cts
Ene
rgy
Info
rmat
ion/
C
omm
unic
atio
n/
Tech
nolo
gy
Man
ufac
turin
g -A
eros
pace
/ A
utom
otiv
e/ In
dust
rial
Med
ia/ E
nter
tain
men
t
Pha
rmac
eutic
al/
Bio
tech
nolo
gy/ H
ealth
care
Rea
l Est
ate
2011 2010
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2011 Median On‐Target and Actual Variable Pay as % of Base Salary
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Level 11 Level 10 Level 9 Level 8 Level 7 Level 6 Level 5 Level 4 Level 3 Level 2
On-Target Variable Pay Actual Variable Pay
* Variable Pay includes Performance Bonus and where relevant Sales Commission / Incentive
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2010 vs
2011 Total Cash Compensation Mix
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50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Level 11 Level 10 Level 9 Level 8 Level 7 Level 6 Level 5 Level 4 Level 3 Level 2
Base Salary Annual Variable Pay
2010 vs
2011 Median Long‐Term Incentives % of Base Salary
0%
5%
10%
15%
20%
25%
30%
Level 11 Level 10 Level 9 Level 8 Level 72011 2010
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Top Three Reasons for Providing a Benefits Programme
Source: Aon Hewitt Benefits and Trends Survey 2011
0% 10% 20% 30% 40% 50% 60% 70% 80%
Control costs
Create alignment
Productivity & engagement
Meet market norms
Retain talent
Attract talent
1st 2nd 3rd Number of responses 185
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Status of Salary Sacrifice and Flexible Benefits Schemes
Source: Aon Hewitt Benefits and Trends Survey 2011
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Not considering introducing
Decided not to introduce
Decided to introduce
Introduced
Salary sacrifice Flex Number of responses 100
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Introduce / extend employee self service
Increase employee satisfaction with benefits
To increase employee engagement
To improve employee understanding of total rewards
Tax and NI efficiencies
Retention, recruitment
Organisational change
Inconsistent compensation arrangements
Diverse needs of employees
Competitive pressures
Changes to pension scheme
Very satisfied Satisfied Dissatisfied Very dissatisfied Number of responses 52
Satisfaction with Flexible Benefits Schemes
Source: Aon Hewitt Benefits and Trends Survey 2011
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Insured Benefits Prevalence
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Level 11 Level 10 Level 9 Level 8 Level 7 Level 6 Level 5 Level 4 Level 3 Level 2
Death-in-Service Private Medical Insurance Long-term Disability
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Use budgets wisely
– Differentiate to recognise high performers and ensure alignment with business needs
– Bring the meaning back to variable pay
– Optimise benefits programmes for both employers and employees
Be fair in pay programmes
– Ensure fairness and transparency
– Benchmark to ensure competitiveness
Be creative in what you offer and how you communicate it
– Focus on all elements of the package including benefits
– Communicate and educate employees on the value of their deal
– Understand the critical role of the line manager
– Listen to employee needs and measure impact
2012 ‐
Organisations Have More Reward Options Than They Think
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Total Reward Survey (TRS) and Executive Total Reward Survey (ETRS)• Data collection period : April – July• Reports available: September – October
Benefits & Trends Survey• Data collection period : July – September• Reports available: December – January
Sales Incentive Survey• Data collection period : March – May• Reports available: July – August
We also have three specialist divisions within Aon Hewitt:
• Radford - specialist compensation and benefits data within the Hi-Tech / Life-sciences sector• McLagan - specialist compensation and benefits data within the Financial Services sector• New Bridge Street - executive remuneration data and consulting
Aon Hewitt’s 2012 Survey Calendar
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Sharing our thought leadership with clients
• Aon Hewitt makes a significant ongoing investment in reward, performance, talent and employee engagement research. We regularly publish research reports, white papers and articles that we make available to our clients.
• Our compensation database covers 180 countries, over 680 globally consistent benchmark positions and over 6 million incumbents. That’s more than any other compensation data provider worldwide.
• Below are some of the recent reward research reports we have published. Please click on the images to read more.
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Aon Hewitt Global Footprint
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Aon Hewitt Limited does not accept or assume any responsibility for any consequences arising from any person, other than the intended recipient, using or relying on this material.
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