The third annual Professional Compensation and Human Resources Practices Survey, just out from Western Growers, contains twice the data of last year’s survey including detailed information on what’s happening with pay and benefits practices in the fresh produce industry in California and Arizona. 

Of special interest are merit increases for 2012. A number of fresh produce companies are planning on increasing merit budgets by 2 to 3 percent, up from a 0 to 2 percent increase in 2010. Does your company offer merit increases or bonuses?

Of the 68 companies completing the 2012 survey, 59 of them offer an annual bonus plan with the majority of these providing bonuses or merit increases to a broad band of employees from executives to field personnel. Austerity measures previously instituted by some employers also seem to be waning.

The most common austerity measure being used is the elimination of bonuses or incentive plans followed by hiring freezes and workforce reductions. Of the companies who had put austerity measures in place during 2011, only 24 percent will continue with them in 2012. The remaining 76 percent are discontinuing those measures. Only five percent of California participants will be implementing austerity measures for the first time in 2012, either eliminating merit increases or reducing the company contribution to 401(k) and other retirement plans. This indicates a large number of members see business improving. Is this a sign of economic recovery?

While the answer to that may be moot, the value of knowing what the market pays for every job classification is advantageous for owners and operators of businesses who want to recruit and retain the best human talent. “In order to make a qualified determination on every human-resource-related line item in a budget, you need a benchmarked standard of comparison like this survey,” said Karen Timmins, Western Growers Vice President of Human Resources. “You need data – good data.”

Labor costs such as base pay; bonus pay; health care insurance; retirement plan and/or 401(k) plan contributions; employment taxes, etc. are the largest line item for a business representing as much as 70 percent of a company’s total budget. If not managed well, a company can under-invest in its employees and risk the loss of valuable talent to the competition. If a company overspends without a good return on investment, it is taking away the ability to invest in other areas of the business.

The 2012 Western Growers Professional Compensation and HR Practices Survey was conducted by a third-party consultant, Fran Mueseler of PeopleMatters Compensation Resources LLC. This ensures the confidentiality of participating companies and guarantees the soundness of the data. It is based on responses from 68 Western Growers’ member organizations collected on eight executive level jobs; eight sales/marketing jobs; 23 plant/office/field jobs and others. The survey also includes data on various human resources practices and policies.