From the compensation experts at Salary.com
If your New Year's Resolution has something
to do with earning more money this year, the 2006 salary forecast
from Salary.com shows that you may be in luck. In fact, 2006 may
be the best time for you to negotiate a pay raise, a bigger bonus,
or even a flexible work schedule. A growing job market in the new
year is the main reason that salary negotiating power will shift
to the employee this year. The primary employer goal of 2006 will
be to bolster employee retention, as a strengthening economy will
have more employees looking for new jobs. Companies will
therefore focus in 2006 on offering their employees more incentives
based on performance, as well as earlier bonuses and salary increases.
This means that the new year is looking quite promising for the
majority of employees who are looking to negotiate their salaries
and earn more.
See below for
the Top 10 Salary Trends For 2006 and how you can use these trends
to make more money this year. Also use The
Personal Salary Report negotiation tool in order to better your
chances of boosting your pay in 2006.
Resources departments will continue to move towards pay for performance,
with a greater emphasis on incentives.
pay increases will maintain at a moderate 3-4% per year, but more
employees will have the opportunity to earn more in variable pay
incentive programs. This opens the door for employees of all experience
levels to set measurable performance goals with their managers,
and be rewarded when they meet or exceed those goals. Just as a
Major League pitcher will negotiate a clause into his contract saying
that he will be paid more for exceeding a set performance level,
a regular rank-and-file employee can convince his/her employer to
pay rewards if they manage to perform at a preset level.
Employers will expand their use of work-from-home programs for
situations, high gas prices, and travel concerns are combining to
make working from home attractive to more and more employees. The
fact is that technology is also making working from home feasible
for employers. If a work-from-home program or flexible workweek
makes life easier for a particular employee, the employer may be
willing to grant this employee his/her wish. The employer will then
be able to retain an employee who is thinking of getting a job closer
to home in order to save gas money, or is thinking of quitting to
become a stay-at-home parent because of high childcare costs.
3. Managers will increase
the use of spot bonuses to provide immediate positive feedback to
bonuses strengthen the connection between pay and performance (i.e.,
behavior and reward). They can also be
a cost-effective feedback mechanism. Even a small reward can motivate
employees and keep them satisfied, which goes a long way towards
the primary employer goal of 2006- to retain employees. Employees
may also see more team spot bonuses this year. One way to improve
your chances of receiving a spot bonus this year is to simply ask
your manager if he/she will offer a spot bonus upon completion of
a difficult or stretch goal.
Employees could start seeing their bonus payments and salary
increases sooner than in years past.
technology will help employers to be more efficient with their performance
and salary review processes this year. Employees
will be reviewed more quickly and will receive their rewards earlier.
For instance, if your fiscal year ends March 31st, you could see
your bonus in your next paycheck, instead of potentially waiting
months for all the administrative work of performance and salary
reviews to be completed.
5. Workers may see an increase
in pay for jobs with increased visibility and increased demand.
that will be in high demand in 2006 include ethics and corporate
governance jobs, control
and accounting professionals, and data and technology security jobs.
If you happen to do one of these high profile jobs, you will be
of great value to your company and can potentially negotiate a higher
salary, more incentives, or a bigger bonus in 2006. Employers will
take measures to retain these professionals.
Retraining will become a challenge for employers and employees.
major factor in keeping employees motivated and satisfied is giving
them the opportunity to develop professionally and climb up their
career ladder. Companies will offer more adult education, corporate
training programs, and online
educational opportunities in 2006 in order to give their employees
the resources they need to make personal progress. More qualified
employees will also help the bottom line. Educational advancement
programs and tuition reimbursements can also be negotiated in order
to help you save money on the rising cost of education.
Employers will find creative ways to attract and retain older
are looking to increase their workforce in 2006 and they fear younger
employees will be the ones who are most likely to "job hop"
for better salaries or better jobs. Older
workers are more likely to stay and therefore could provide stability.
Employers will be looking for creative ways to retain these older
Companies and their boards will be looking to re-evaluate, cut
back, or eliminate components of their executive pay programs.
employers may eliminate executive severance packages (otherwise
knows as golden parachutes), cut
back on executive perks, and reevaluate SERPs
(Supplemental Executive Retirement Plans). This means that there
may be more funds available for spot bonuses, pay for performance
incentive plans, and merit salary increases for the regular rank-and-file
9. The use of signing bonuses
will return in moderation.
and competing for talent in 2006 will bring back signing bonuses.
Employees who are in high demand may even have the ability to request
or negotiate a signing bonus during the interview process. Employers
will be more cautious with the frequency and magnitude of signing
bonuses than they have been in the past, but keep in mind that this
is yet another piece of your total rewards package that may be negotiable
in the new year.
Stock option usage will continue to slow.
In 2006, companies will move from issuing stock options to providing
employees with one-time grants, restricted stock, or cash. This
is due to recent FASB (Financial Accounting Standards Board) regulations,
which now require companies to expense stock options. While stock
options are an effective motivating tool, and have been used widely
in technology companies and startups, employers will look to replace
them with other motivating tools, such as cold, hard cash.
is the leading provider of compensation-related data, applications,
and services to enterprises, small businesses, and individuals.
Salary.com's products shape, influence, and facilitate millions
of pay-related decisions each year. Salary.com's enterprise software
helps companies manage their compensation expenditures with real-time,
decision-ready data and analytical tools. Backed by a team of Certified
Compensation Professionals, Salary.com is your partner in compensation.
By: Dan Malachowski,