Michigan’s economy has been growing steadily for the past five years and is expected to keep up the pace in the coming years. And with that growth comes a new — but enviable — challenge for employers: retaining top talent.
“As the economy continues to improve, the job market is also heating up, making it potentially more difficult to retain top employees who may have previously stayed due to fewer competitive opportunities,” said Mary Corrado, president and CEO of the American Society of Employers.
To combat the problem, many Michigan companies are doling out annual bonuses to executives as well as hourly workers, according to a recent survey of more than 200 of the state’s employers by Livonia-based ASE. The number of firms offering bonuses to executives is fairly flat, but there is growth in the number of companies using bonuses to keep salaried employees.
“These strategies are gaining greater popularity across all levels of the company,” said Jason Rowe, manager of survey services for ASE.
It’s not just large companies offering bonuses, either. Bingham Farms-based Wolf-Chandler Agency LLC recently implemented a weekly bonus structure for its seven-member team.
“They are very happy,” said Matthew Wolf, who opened the agency with his partner, Steve Iuppenlatz, last year. “We had been talking about it for a few weeks. It’s fun. They have a carrot every week to shoot for.
“It’s important to retain talent and motivate them. I’m a member of the Entrepreneurs Organization, and they always promote that, so we wanted to implement it.”
The second most common strategy among companies seeking to retain talent was profit-sharing, followed by team-based incentives. What hasn’t changed, however, is the budget for salary increases. Most employers expect a 3 percent increase in salaries in 2014 and plan for the same baseline in 2015.
It takes more than money to hire and motivate the right employees, however. It also takes a culture of opportunity and fun, said David Leider, CEO of Birmingham-based Gas Station TV, which has been on a hiring spree.
“Nondirect financial elements seem to be very important to employees,” Leider said, who has 76 employees. “That ties around opportunity. You have to be competitive from a financial perspective — things like salaries and bonuses — but we also give people the feeling that there will be continued opportunity. They don’t want to be a cog in the system.”
GSTV, which provides digital entertainment video at gas pumps, offers a bonus structure to all of its salaried employees and considers it part of the total compensation package. So when the company pitches employees, it tells them the total number, including bonus, as what they can earn.
“That may seem nuanced,” Leider said, “but people get really excited. They understand that there is a part they have to work for and a part that is guaranteed.”
That’s a significant change from the throes of the recession when companies were implementing wage freezes, not finding ways to increase compensation. In fact, ASE found that wage freezes have finally thawed: Just 6 percent of those surveyed expect to use that tactic to control costs in 2015 compared with 67.8 percent in 2009.
“I see a lot of growth,” said Wolf. “I’m growing, my clients are growing. They are adding employees, buying buildings. It’s a tight market for talent.”
The ASE salary survey is available free to members and for $525 to others by emailing email@example.com.