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.

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 Power of a Cross-Industry Study

Volume I of the final report will focus on the data collected for SEDA distributors as a group. That is, firms can compare their compensation levels and benefit programs to other SEDA distributors. This ability to compare to similar firms in your industry is of significant value.

With the combination of over 35 distribution groups, though, a much more powerful analysis is possible. Volume II aggregates the results of the entire sample which enables an in-depth examination of the data by both geographic area and firm sales size.

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.

As mentioned earlier, all of this information will be available at the national level as well as by geographic location and sales size of firm. The 2006 report provides an unprecedented opportunity to fully understand labor markets and is available only through the combined efforts of more than 35 different distribution organizations.

Schedule

The survey will be conducted in the January-February time period in 2006. Questionnaires will be 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 the beginning of March. This should give every firm ample time to complete the questionnaire. 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 by May 2006. Since it will cover the 2005 calendar year, the information will be extremely current as well as timely.