Canadian workers in retail and wholesale trades are getting some of the best incentive rewards this year, a new survey shows.
Professional and skilled-trades staff working in the retail and wholesale trade sector received the highest average portion of their compensation as bonuses or other perks, averaging 32 per cent of their salaries.
People working in the utilities and energy sector received the lowest average proportion of incentives – 4 per cent of their salaries, the survey by Towers Watson Data Services found. The survey covered 239 organizations in 50 geographic areas and 104 industry classifications.
Bonuses or other cash incentive payments, such as profit-sharing and commissions, represented an average of 24.5 per cent of salary of the 98,000 employees studied.
The survey also found that Canadians earning the most are far more likely to be paid on their performance than those in lower-paid roles.
The portion of eligible employees receiving a short-term incentive ranged from a high of 35.5 per cent of professional and skilled-trades workers earning $100,000 or more, to a low of 25 per cent of those who earn less than $40,000.
“The survey points out that bonuses and incentives are increasingly being used more in organizations and much more broadly,” commented Ofelia Isabel, Canadian practice leader for talent and reward for Towers Watson in Toronto.
“The people who are eligible for them include those at the lowest pay levels more consistently than in past years”
And the survey also highlights a general trend that companies are looking to increase the “line of sight” in pay, she added. “Employers find it adds motivation if people can directly see what they do, day to day, results in the company's profitability and boosts their income.”
Sector trends
In some industries, bonuses are the norm. More than three-quarters – 81 per cent – of those in the banking and finance sector received incentive compensation. That compares with less than a quarter of those in service industries: Health-care workers, for example, on average received only 4.3 per cent of their compensation as incentive payments.
Regional differences
Employees in the Northern Territories, Manitoba and Saskatchewan are the most likely to get a bonus or other form of cash compensation, including profit-sharing, than those in British Columbia, where only 22 per cent of eligible workers receive incentives.
But those on the West Coast who do get a bonus are more likely to receive a larger one, with payouts representing an average of 32 per cent of their salary. In Manitoba, Saskatchewan and the North, incentives account for between 6.5 per cent and 17 per cent.
Size matters
Employees in large organizations fared somewhat better than those in small to mid-sized organizations. In companies with more than 2,500 full time employees, about 22.5 per cent received incentive payments (averaging about 30 per cent of their base pay).
In companies with fewer than 1,000 employees, almost half were in line for incentives that averaged 10 per cent of their salary.
The numbers may be higher next year as companies look to an economic recovery, another recent Towers Watson survey predicted. In the fall survey, 200 companies were asked about how much they were budgeting for salaries and bonuses in 2011. Ninety-eight per cent said they are planning to increase salaries, by an average of 3.1 per cent for executives and between 2.9 and 3 per cent for professional and hourly employees.
For all employee groups, the pools of cash being allocated to incentives and bonuses are higher than those set aside for 2010.
While budgets for incentive spending will be up, the increase is not as high as in the United States, but that is a factor of the difference in the two economies, Ms. Isabel said. Last year in Canada, bonus spending was down but not nearly dramatically as in the United States where the economy was harder hit. “Next year's bonus increases there will only level the playing field.”
