An interesting combination of data has crossed my computer screen in recent days...
First this. Based on its recently released quarterly Business Confidence Survey, Administaff reports that most small businesses are meeting or exceeding their growth projections, nearly half are in the process of adding full-time staff, and comparisons to last year indicate that average compensation is up 5.8%.
Specifically:
- 54% of surveyed companies say they are meeting their 2008 business projections and another 21% state that they are exceeding those projections.
- 43% of surveyed companies say they are hiring additional full-time employees and 13% are adding part-time staff.
- A comparison of compensation data (from a base of more than 6,100 small and medium-sized businesses) with the same period in 2007 shows that average compensation is up 5.8% and average commission rates have increased 3.9%.
And then, from its recently published Salary Budget Survey, WorldatWork also reveals some interesting statistics on average actual 2008 and projected 2009 salary budget increases, by organization size:
- Organizations with 1-499 employees
- Average actual 2008 increase: 4.3%
- Average projected 2009 increase: 4.3%
- Organizations with 500-2,499 employees
- Average actual 2008 increase: 3.9%
- Average projected 2009 increase: 3.9%
- Organizations with 2,500-9,999 employees
- Average actual 2008 increase: 3.9%
- Average projected 2009 increase: 3.8%
- Organizations with 10,000-19,999 employees
- Average actual 2008 increase: 3.8%
- Average projected 2009 increase: 3.8%
- Organizations with 20,000+ employees
- Average actual 2008 increase: 3.7%
- Average projected 2009 increase: 3.6%
Evidence that smaller businesses are adding jobs and increasing salaries at a higher rate than their larger counterparts. As a small business owner myself, as the spouse of a small business owner, and as someone who has occasion to work with a number of small and mid-sized businesses, I find the information heartening.
Hooray for entrepreneurialism!
Ann -
Interesting data, and it matches my experience. In my experience, smaller businesses are more apt not to be locked into policy and procedure, and more apt to keep stars and even average performers by any means necessary. Larger orgs will be more in tune with managing the policy...
Thanks - KD
Posted by: KD | September 01, 2008 at 09:01 AM
KD-
I would agree with your point, and my experience mirrors yours. Smaller businesses are more fleet of foot and less bound by controls in this area, so they are more likely to take the pay steps necessary to reward and retain employees, particularly those seen as key assets.
Thanks for the comment!
Posted by: Ann Bares | September 01, 2008 at 09:59 AM
I've worked for several organizations over the past 10 years from 100 people to 15,000 people and I have seen the same thing. Small companies have a lot more flexibility in rewarding high performers and unlike larger organizations, high performers are less likely to get lost in the approval hierarchy.
In larger organizations, I've experienced management that too quickly takes the peanut butter approach where merit dollars are applied thinly across all heads. The end result - high performers who don't feel well rewarded and under performers who are unjustly rewarded. When the difference between a solid performer (3.5%) and an under performer (2%) is only 1.5%, it can hardly seem worth the effort to be a strong performer.
Posted by: Mary McDonagh | September 03, 2008 at 03:45 PM
Mary:
You have a valuable perspective, having been in organizations at both ends of the size continuum - thanks for sharing your thoughts.
It is an interesting phenomenon, isn't it?
Posted by: Ann Bares | September 05, 2008 at 07:05 AM