Friday, August 28, 2015

The Big Bonus

There's an interesting effect in American compensation trends, uncovered by a new study out from Aon Hewitt, an international human capital and management consulting company. Companies are spending more than ever on compensation - but with a twist. While the pay raises are impressive, bonuses are growing at a much faster rate.

Aon Hewitt predicts that base pay for salaried exempt employees will increase by 2.9 percent in 2015. That means base salaries will roughly be keeping pace with the growth of the U.S. economy. But variable pay increases - which includes bonuses and other incentives - will increase 12.9 percent.

Companies have long budgeted more money to  bonuses than across-the-board pay raises, but the trend has sharpened greatly in recent years. A similar survey in 1996 showed a much closer relationship -  salaries rose by 3.9 percent while bonuses rose by 7.5 percent.

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