According to Hay Group’s survey, 18 percent of respondents across all industries reported that they will maintain a salary freeze across all levels in 2011 to reduce compensation costs, while only 4 percent of respondents in healthcare reported an across-the-board freeze on salaries.
“Healthcare providers have felt the pinch, but salary budgets are beginning to move upward, mirroring the slow ascent we are seeing in the broader economy,” added Seifert. “Interestingly, healthcare salary trends are also starting to track those of other industries, which we haven’t seen for at least a decade.”
Fewer healthcare executives will see their salaries frozen in 2011, with 8 percent of organizations reporting a freeze of executive pay. That’s compared to just over 20 percent of organizations that reported freezing executive pay in 2010. Hay Group’s survey also shows a parity of planned salary increases for healthcare employees in 2011 with both executives and all employee groups seeing a 2.6 percent increase.
“With executive salary budgets rising at the same level as staff this year, it’s clear that boards are concerned about public perception of executive pay,” said Seifert. “However, it’s critical that compensation committees balance their concern of scrutiny with their need to attract and retain the best possible talent to lead their organizations.”
Salary increases for physicians are still lagging slightly at 2.3 percent, while nursing will see a 2.7 percent salary increase in 2011. High performers/potentials will see less than 1 percent more than all employees with 2.8 percent planned base salary increases for 2011.
“With limited budgets, healthcare organizations are still resistant to differentiate pay for top and average performers,” said Seifert. “However, if healthcare organizations want to retain high performers and high potentials, they need to treat them fairly – which does not always mean that everyone gets the same amount.”
