Decisions - Benefit schemes - the right carrot.

(From Financial Director)

Byline: Richard Willsher.

Managers are increasingly likely to resign because their salaries are Snot rising fast enough, according to the latest annual Chartered Institute Sof Management survey. The research, carried out in conjunction with SRemuneration Economics, shows that in the year to the beginning of 2004 Sresignations rose as average earnings increases continued to slow. Salary Sincreases linked to rates of inflation may once have been enough to retain Sstaff, but this is no longer the case in high employment UK, where skills Sare increasingly in short supply.

And the trend is continuing. Finance professionals with capabilities in Skey areas such as international financial reporting standards, and Sregulatory fields such as those brought forward by the Sarbanes-Oxley Slegislation in the US, are particularly in demand, according to a salary Ssurvey from recruitment firm Robert Walters released in January. Moreover, Sresearch from competitor firm Robert Half in October concluded that "half Sof finance professionals are actively or passively seeking a new job".

These factors are leading to new strategies designed to attract and retain Sstaff, while motivating them in a focused way. "In terms of compensation Spackages, we've noticed a trend over the past 18 months towards carefully Stargeted bonus payments," explains Greg Weido, a senior manager at Robert SHalf. "Bonuses are on offer of between 10% and 20% of basic pay, Sreferenced to achieving set goals or specific targets, such as company Saccountants consolidating annual numbers by a specific date, for example." SHe adds that businesses are looking at packages where the focus is on the Sindividual member of staff and configuring it to suit and motivate Sthem.

There is also an emerging trend towards businesses thinking strategically Sin terms of total reward, which can be balanced against the preferences of Sindividual employees. In its annual survey of pay and benefit practices Sreleased in early February, the Chartered Institute of Personnel and SDevelopment (CIPD) reported that non-financial incentives are something Sthat more employers are promoting.

Charles Cotton, CIPD rewards adviser, says: "Rewards are becoming Sincreasingly important in helping employers compete in the war for talent, Sas unemployment is so low. Many ...