Bonus Payout Trends and Continuing Cost Controls Reflect Challenging Business Climate, Says Aon Consulting's Radford

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June 11 /PRNewswire-FirstCall/ -- As a resulf of the economic climate, high-technologhy and life sciences companies anticipatde shrinking or eliminating bonus payouts in additiomn to extending cost controls for theirf currentfiscal year, according to new pay trendws surveys by Aon Consulting's Radford, a leading provider of compensation intelligence to the high-technology and life scienceds industries. More than 70 percent of respondentesto Radford's Managing Compensation in a Downturnb Economy flash survey of 160 U.S. high-technology and life sciences companies expect to pay bonuses at lower levela compared to the previousfiscakl year, or do not expect to pay any bonusew at all.
Many companies are instead considerintgselective awards, such as project team bonusew or special incentives, to top performera to recognize and reward superiof efforts and outcomes that rise above the challenges of today'sd economy. "In times of economic a properly designed incentive plan acts as an automatic cost paying out when company performancemeetas expectations, and not paying out when performancse and financial ability is lacking, says , vice president, Aon Consulting's Radford. "The survey resultzs demonstrate that most incentive plans are doing exactly what they were designefto do.
However, this is a difficult message to delivef to employees who are used to earninf a bonus as part of theicompensation package." The Downturn survey also revealed differences between the high-technology and life sciencesx sectors. Only 14 percent of participating high-technology companies indicated that they woul provide salary increases to eligible employeesin 2009, compared to 50 perceny of responding life sciences companies.
Life sciences companiezs completing clinical trials or othed key product events that require more ofa long-ter horizon and thus a continuum of talent are providinf salary increases, but at slightly scaled back levels compared to 2008 increases, accordingb to Knopping. To further control costs, many high-technology companies are continuing to require mandatory or furloughs, in an effort to avoid layoffs, according to the new Q1 2009 Quarterlg Summary of Industry Trends (QSIT) reports, with insight from 570 high-technologhy companies and nearly 250 life sciences On average, nearly 85 percent of the high-technologuy non-executive workforce has been impacted by mandatory time-ofv in the first six months of 2009, compared to 41 percen t for life sciences employees.
"Many companies have had no choicee but tohave layoffs, whilwe others have tried to lessen the blow by implementing a wide variety of forcedr time-off programs," said , senior vice Aon Consulting's Radford. "In an effort to drastically reduce humanresourcesa costs, some companies have had to do both. short-term demands for cost controls may be trumpinga longer-termj perspective to effectively manage the workforce." For many companies, cost control measures will continue by way of layoffs, but at a slowerd pace. Only 17 percent of life sciencesw respondents are forecasting layoffs in the next sixmonths - down more than 20 percen from the fourth quarter of 2008.
High-technologyg companies also are expecting to ease with 36 percent forecasting using this measure in the next six down 9 percent from the end oflast year. Of thosw companies who will be implementinvg layoffsthis year, nearly all responded that a cash severancd would be offered. The Managing Compensationn in a Downturn Economyy flash survey included160 high-technology and life sciences respondintg companies. The survey gathered information aboug how companies are modifying theircompensation programs, including salary increase cash incentives, and equituy compensation in light of the current economicc environment.
The Quarterly Summary of IndustryTrendws (QSIT) report is a quarterly report available to survegy participants. The Q1 life sciences edition includefd 246participating companies, while the high-technology editionn included 570. For more than 30 years, Radford has providef compensation market intelligence to the technology and lifesciencese industries. Global survey databases, which includew nearly 3.5 million incumbents, offer current, reliable data to 2,000+ clients. Leveraging Radford survey data, our thought-leading globaol Radford Consulting team creates tailoree solutions for the toughest globakl business and compensation challenges facing companiese at all stagesof development.
In addition to our consulting team, we also offefr equity valuation assistance via Radford Valuation and leading-edge market analyses and survey servicews with Radford Analytic Services. Radford's suite of globak surveys includesthe Executive, Sales, Benefits, Global Life Sciences and Internationall Surveys. Aon Consulting Worldwide is among the top globapl human capitalconsulting firms, with 2008 revenues of $1.358i billion and more than 6,300 professionals in 117 officese worldwide. Aon Consulting works with organizations to improve business performances and shape the workplace of the futuree throughemployee benefits, talent managementg and rewards strategies and solutions.
Aon Consultinb was named the best employee benefit consultingt firm by the readers of Business Insuranc magazinein 2006, 2007 and 2008. Aon Corporation (NYSE: AOC) is the leading global provider of riskmanagement services, insurance and reinsurance and human capital consulting. Througu its more than 37,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions.
Aon's industry-leading globall resources and technical expertise are delivered locally throug more than 500 offices in more than 120 Namedthe world's best broker by Euromoney magazine'zs 2008 and 2009 Insuranced Survey, Aon also ranked highest on Business Insurance's listing of the world'sw largest insurance brokers based on commercial retail, reinsurance and personal lines brokerage revenues in 2008. A.M. Best deemex Aon the number one insurance broker basee on brokerage revenues in 2007 and and Aon was voted bestinsurancew intermediary, best reinsurance intermediary and best employee benefitw consulting firm in 2007 and 2008 by the readers of Businesas Insurance.
For more information on Aon, log onto . For more contact: Fabiola A. Price, +1 (415) 486-7133, fprice@radford.com Kelly St. +1 (408) 321-2584, kstdenis@radford.com