Most firms indicate their planned compensation increases for 2003 will be between 3% and 5.7%, with the Southwest accounting for the highest anticipated increase and the Northeast the lowest. Projected increase rates for 2003 are slightly higher than 2002 actual increases, indicating agents’ and brokers’ concerns about a lack of available talent and the need to remain competitive, according to Business Management Group’s (BMG’s) 2003-2004 Non-Producer Compensation & Benefits Study.
“The cost of health care coverage for many firms is projected to average nearly 25% of wages in less than five years, so firms are evaluating the cost of health care and retirement benefits before deciding how much to award in raises,” said Suzy Hammett, BMG vice president and author of the published survey. “Certainly training existing and new hires is an important way to avoid the salary spiral brought on by offering large pay increases to lure seasoned personnel from other agencies.”
However, this approach to cost containment is not enough. The tight labor market has driven up mean salaries for operations and sales managers by 18% since the last survey in 2001.
To combat this, the trend in compensation has clearly shifted towards variable pay related to business results and meeting individual objectives. The number of agencies offering incentive plans to managers has jumped to 82% form 47% in 1999 and companies that offer incentives to non-manager staff has held steady at a significant 74%.
Thesurvey is available for purchase from BMG by contacting it at 800-772-0208 or visiting the Web site: www.bmgconsulting.com .