As the end of the calendar year draws near, many economic developers are thinking about how to spend that big bonus check. Others are wondering how to convince their EDO to create a bonus plan. It is also the time of the year to think about salary raises for you and your staff. We have had inquiries lately about pay, benefits, and bonuses so we are revisiting some data from the 2021 NCEDA and 2019 IEDC salary surveys. We also share a few insights to help you structure a bonus and make the case for raises that help you retain talent.
Approximately 43% of respondents to the NCEDA salary survey reported they have an opportunity for additional cash compensation. This was lower than in 2019, which could indicate fewer EDOs met performance goals due to the pandemic. Of those receiving additional cash compensation, the average received was $6,036 and the median was $4,250. There was a wide range of bonuses from $30 to $25,000. The 2019 IEDC average for the almost 60% that are eligible for a bonus was $5,600, similar to the NC bonus amount. Keep in mind, these figures are individuals reporting their own bonus, not a bonus to all staff in the office.
We were recently asked by a local government EDO if any local governments paid bonuses, or are bonuses only given in nonprofit or private EDOs. We found that about 21% of local government EDOs responding to the survey reported eligibility for “additional cash compensation other than your base salary.” The average bonus was $4,132 with a high of $10,000 and a low of $400. The median is $3,600. These figures are less than the overall average, indicating that nonprofit and for profit EDOs pay higher bonuses.
A question we often get asked is how to structure a bonus system. We recommend using the EDO’s strategic plan to identify measurable goals for the year. Examples are X BRE visits, X digital marketing campaigns, X% increase in web traffic, completing due diligence on X sites, etc. We do not recommend jobs and investment as the only metrics because there are numerous factors that determine whether a community attracts new jobs and investment. We also recommend that the bonus be given to the office and the director allocate among staff. This reflects that it takes the whole team to make the organization successful.
Economic developers are also thinking about raises this time of year as they plan next year’s budget. According to the NCEDA Salary Survey, for the year ending December 2020, 63% of respondents reported receiving an increase in base pay. This was a significant drop from the 71% in 2019. IEDC reported that 70% received a raise in 2018, similar to the NCEDA percent in 2019. The decline in 2020 may be due to the uncertainty of local government revenues and general economic uncertainty. The average raise was 4.6%, slightly down from 5% in 2019. The largest group (50%) of IEDC respondents said their raise was less than 5%.
Salary survey data was gathered in late 2020, before the Great Resignation gained momentum this year. Even in the wake of record resignations, the Society for Human Resource Management (SHRM), reports the average 2021 raise will be 3% and projects the 2022 average will remain around 3%. This is anticipated to trail inflation. Employers concerned with retention (which should be every employer) should consider this when determining raises for next year. Economic developers report raises higher than the average of all industries at 4.6% in 2020 and 5% in 2018. Thus, employers who want to retain top talent should consider raises above the average 3%.
You can read our original blog and summary of the NCEDA salary survey here. You can access the entire survey on our website here. Contact us with your questions. If we don’t have the data you are looking for, we can do a quick comparison survey of peer organizations through our Creative Back Office Suite of Services.