Health Care Orgs' Pay Increase Budgets Slightly Down

May 13, 2011 (PLANSPONSOR.com) - The 2011 Compensation Data Healthcare Survey found pay increase budgets fell to 2.4%, a slight decline from 2.5% reported in 2010.

However, this decrease is less than the drops seen in 2009 and 2010, in which pay increase budgets fell around half of a percent each year, according to a report on the survey by Business and Legal Reports (BLR). Pay increase budgets are projected to remain relatively stable in 2012 at 2.5%.  

BLR noted that companies use pay increase budgets to make a number of different increases to their employees’ salaries. CompData found that nearly 67% of health care organizations are allocating a portion of their budget towards merit increases. More than 33% are making market adjustments to their salaries, while 15.8% are including promotional increases. Only 10.4% of survey respondents are utilizing their pay increase budget for cost of living increases.   

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The rate at which these increases are used varies widely by industry. Merit increases are being offered at 94.7% of home care organizations. Physician clinics follow at 81.6%, with behavioral health care facilities reporting them at 71.4%. Hospitals are offering merit increases at a rate of 65.8%, while critical access hospitals are reporting them the least at 50%.   

In addition, according to BLR, the survey showed the average merit increase budget reported in 2011 was 2.1%, with health care organizations projecting the same for 2012.  

Compensation Data’s 2011 Healthcare Survey contains data on 250 industry-specific job titles and more than 350 benchmark titles ranging from entry-level to top executives. Data was collected from more than 1,100 health care employers reporting on nearly 5,300 locations across the country. The results provide a comprehensive summary of pay data, benefit information and pay practices with an effective date of January 1, 2011.  

The survey report can be purchased from http://www.compdatasurveys.com/compensation/healthcare/.

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