Employee Compensation at Health Insurers Poised
for Modest Growth in 2011, according to Hay
August 19, 2010 01:12 PM Eastern Daylight Time
PHILADELPHIA--(EON: Enhanced Online News)--Hay Group’s 2010 Health Insurance Survey, released today,
had some positive news for health insurance employee compensation in 2011. Median salary budget increases (the
total available budget to invest in employees through salary) for 2011 are expected to reach 2.9 percent for
executives and 3 percent for all other employee levels. This is a slight increase from last year’s survey that reported
median salary budget increases of 2 percent for executives and 2.5 percent for all other employee levels. Merit
increases, which are one piece of the total salary budget, are also expected to climb in 2011 by up to 0.5 percent
depending on the employee level.
“This added merit budget increase, while relatively small, will allow organizations to provide raises for employees
who exhibit added value, which is especially important as companies plan for major changes in the wake of
healthcare reform. However the industry may transform, these organizations are clearly stating they will invest to
keep their best people,” said CJ Bolster, National Director for Hay Group’s Healthcare Practice.
Hay Group’s survey also found that 48 percent of organizations have not reviewed their performance-based
employee incentive plans in five to ten years, compared to the cross-industry standard of three to five years.
“With so many questions around the new payment structure resulting from healthcare reform and the economic
recovery, health insurance organizations are working to define what ‘performance’ will mean in the future,” says
Cheryl Mikuls, Vice President with Hay Group. “As the industry becomes more aware of the impact of these
variables on their business performance, reviewing incentive plan design and metrics will be an important initiative.
Companies will clearly want to ensure employees focus on driving the