by Roy Harris

Finance Executives Lack HR’s Optimism in Their Bonus Expectations for 2011

Nov 04, 20113 mins

Survey among managers in various areas shows only 21% in finance and accounting expecting higher incentive pay, compared with 42% in HR

A survey of the 2011 bonus-pay expectations among executives shows that employees at three of every 10 companies that paid bonuses last year can expect at least the same size bonus. But the survey also suggests that finance and accounting managers have significantly lower expectations about incentive payments to be made this year, compared with human resources managers.

Indeed, while 42% in HR expected higher bonus levels at their companies, only 21% in the finance and accounting area foresaw bonus levels being higher this year.

Overall bonus expectations reflected in the survey, conducted for Robert Half International by an independent research firm, showed half as many executives — 14% — expecting lower bonus amounts from their companies, compared to the 30% expecting higher bonuses. Those overall numbers showed that 53% expected the same level of bonuses.

The survey was based on 1,250 telephone interviews with senior U.S. executives of companies that had paid bonuses to employees in the prior year.

Expectations by Discipline

Respondents included CFOs, CIO, HR managers, lawyers, and advertising and marketing executives, and results were broken down by the respondents’ professional areas, offering a look at how their expectations differed depending on their business discipline.

Among finance people, 17% expected lower levels of bonus payments at their companies, with 60% anticipating a steady payment level. Among HR executives, only 10% said they expected lower levels of bonus payments, with 43% expecting the same bonus levels. The full survey results also include an infographic breakdown of the data by business field.

Among CIOs and other executives in the technology field, 25% expected their companies to pay higher bonuses, with 18% expecting them to be lower, and 53% seeing them staying steady.

Even more pessimistic than HR, IT and finance executives were those in advertising-and-marketing, and in the legal field. Only 12% in the law area expected higher bonuses, with 4% seeing bonus levels as declining, while 73% saw them as remaining the same.

More Bonus for More Revenue?

There wasn’t a detailed explanation by Robert Half Finance and Accounting about the reasons different executive groups expected greater or lesser bonus amounts. But Kathy Downs, an Orlando-based recruiting manager for the division, said: “As competition for highly skilled professionals, including accountants and IT staff, intensifies, some companies are increasing the amount of their bonuses to help keep valuable staff members on board.”

In an e-mail response to a question about the survey results, she added: “Human resources managers are taking a broader look at compensation across the enterprise, in particular for revenue-generating roles, critical talent pools and high performers. HR also is typically the area most focused on finding ways to increase employee engagement, with boosting compensation a key motivator.”

Robert Half believes that, although bonus levels may be rising at many organizations, employers are paying close attention to how the increases are distributed. It expects that the largest increases will be saved for top performers, particularly those who can drive revenues.