FINANCIAL INCENTIVES TO HOLD STEADY IN 2006

Majority Of CFOs Polled Don't Expect To Increase Raises And Bonuses Next Year

MENLO PARK, CA -- The majority of the nation’s employees are not expected to receive higher raises and bonuses in 2006 than they did in 2005, a new survey finds. Less than one-third (29 percent) of chief financial officers (CFOs) polled said they will give bigger salary increases in the coming year and just 20 percent anticipate boosting bonus amounts.

The survey was developed by Robert Half, the world’s first and largest staffing service specializing in the accounting, finance and information technology fields. It was conducted by an independent research firm and includes responses from more than 1,400 CFOs from a stratified random sample of U.S. companies with 20 or more employees.

CFOs were asked, “For 2006, do you anticipate offering higher raises than in 2005?
Their responses:

Yes 29%
No 64%
Don't know/no answer 7%
  100%

CFOs also were asked, “For 2006, do you anticipate offering higher bonuses than in 2005?” Their responses:

Yes 20%
No 67%
Don't offer bonuses 7%
Don't know/no answer 6%
  100%

CFOs who said they expected to increase raises and bonuses in 2006 were asked by what percentage these forms of compensation would rise. The mean responses were 5 percent for raises and 7 percent for bonuses.

“Many companies may be hesitant to increase employee compensation because of other expenses impacting the business, such as rising healthcare and energy costs,” said Max Messmer, chairman and CEO of Robert Half and author of Motivating Employees For Dummies® (John Wiley & Sons, Inc.). “But an overly cautious approach can be detrimental, particularly as the competition for top candidates intensifies. Firms that fail to reward good performance risk losing their best talent.”

Added Messmer, “Organizations unable to offer higher raises and bonuses should look for other ways to recognize and motivate their teams, such as offering professional development opportunities and enhancing the work environment. While employees value financial incentives, they also place great importance on their company’s corporate culture.”

Robert Half has more than 330 locations throughout North America, Europe, Australia and New Zealand, and offers online job search services at www.roberthalf.com.


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