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May 17, 2011
Pay Increase Budgets for Healthcare Organizations Decline Slightly, Says Survey

While survey results of healthcare industry pay budgets show a decrease, there appears to be a level of cautious optimism within the [healthcare] industry in regard to the economy, said Amy Kaminski, director of marketing for Compdata Surveys, a leading pay and benefit survey data provider. "Employers are taking a conservative approach, and we expect only a gradual increase over the next few years."

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Compdata's 2011 Compensation Data Healthcare survey results found pay increase budgets in healthcare fell to 2.4 percent, a slight decline from 2.5 percent reported in 2010, this decrease is less than the drops seen in 2009 and 2010, in which pay increase budgets fell around half of a percent each year. Pay increase budgets are projected to remain relatively stable in 2012 at 2.5 percent.

Companies use pay increase budgets to make a number of different increases to their employees salaries, reports Compdata. Nearly 67 percent of healthcare organizations are allocating a portion of their budget towards merit increases. More than 33 percent are making market adjustments to their salaries, while 15.8 percent are including promotional increases. Only 10.4 percent of survey respondents are utilizing their pay increase budget for cost of living increases.

The rate at which these increases are used varies widely by industry. Merit increases, for example, are being offered at 94.7 percent of home care organizations. Physician clinics follow at 81.6 percent, with behavioral healthcare facilities reporting them at 71.4 percent. Hospitals are offering merit increases at a rate of 65.8 percent, while critical access hospitals are reporting them the least at 50 percent. The average merit increase budget reported in 2011 was 2.1 percent, with healthcare organizations projecting the same for 2012

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