February 2006                   return to the newsletter contents page

Winning the Compensation and Benefits Battle

2006 Employee Compensation Survey Mailed

One of the major challenges facing business owners is in providing a fair and adequate compensation and benefits package for employees. If the package is insufficient, the company cannot attract and keep qualified personnel. If the package is too generous, profit tends to suffer.

In trying to establish a sound compensation system, managers are continually looking for benchmarks. That is, they want to know how much other companies are paying for certain positions. They also want to know what fringe benefit packages are being offered. Such benchmarking is essential for the two key types of employees and requires two different types of analysis.

• Executive Compensation—For top management positions, such benchmarking is often national in scope. In attempting to attract a top CFO, for example, the firm may compete with a large number of distribution firms across the entire United States.

• Employee Compensation—In terms of operating employees, the relevant market is always local. Comparisons for truck drivers, warehouse employees and sales representatives in a particular geographic area are much more useful than are national averages.

Even though compensation benchmarks are critical, developing such benchmarks has always been a very difficult undertaking in distribution. Typical compensation surveys almost always focus on one particular line of trade. As a result, they tend to have very small sample sizes. The resulting information is fragmentary, at best.

The 2006 Employee Compensation Study eliminates these problems. SEDA has joined together with more than 35 other distribution organizations in sponsoring the largest cross-industry compensation survey ever conducted. It is anticipated that approximately 2,500 firms will take part. With such a large-scale study, SEDA distributors will receive a wealth of information.

The availability of such a large sample size broken out into so many specific sub-categories provides managers with an enormous amount of data for decision making. For example, firms thinking about opening an additional branch in a new geographic region will have precise payroll information at hand for the target geographic area.

Likewise, firms of any given sales size will have an idea of the extent to which specific fringe benefits are provided by similarly sized firms. They will also have information on what sales volume level must be attained before certain fringe benefits become realistic additions to the company's compensation package.

Types of Information Provided

Both Volume I and Volume II of the report will include two types of data—compensation levels by position and fringe benefits. Each section contains a wide range of information for the typical SEDA distributor.

Schedule

Questionnaires were mailed to SEDA distributors in early January. Since all firms in the United States are required to report employee financial information to the federal government by the end of January, almost all of the information required for the survey should be readily at hand.

The surveys are due back by March 15. All information collected in the survey is absolutely confidential. No member of the SEDA  staff will have access to any firm’s survey data. All questionnaires are returned directly to Profit Planning Group, the research company conducting the study.

The final report, including Volumes I and II, should be in the hands of SEDA members by May 2006. Since it will cover the 2005 calendar year, the information will be extremely current as well as timely.

To download a copy of the form, click here.

The 2004 Employee Compensation Report containing 2003 data is available for purchase now by non-participating members at the discounted price of $125. The 2006 Employee Compensation Report containing 2005 data will be available for purchase in May 2006 for $250. If you would like to order a copy of the survey please fill out the form and return it to SEDA Headquarters.