Local wholesale distributors fought the recession in part by scaling back benefits for their employees, and they fought well enough that many of them are poised to add talent in the near future.
Those were two of the most interesting themes that developed this spring when Barnes Dennig and USI Insurance conducted the ninth edition of our Wholesale / Distribution Compensation and Benefits Benchmarking Study of companies in Greater Cincinnati, Dayton and Northern Kentucky.
Of the companies surveyed, 51.7 percent said they anticipate hiring additional employees in 2010. This is down from 61 percent in 2008 and 76 percent in 2006. But considering how hard local companies have been hit since early 2008, it seems encouraging that more than half of the respondents are in position to add employees rather than subtract.
The other promising note is that the average Return on Total Assets (ROTA) increased from 2008. The study was broken down into companies with more than 50 employees and those with fewer than 50, and the companies with more than 50 showed a significant increase in ROTA.
Coincidentally or not, the larger companies – those with more than 50 employees – use compensation plans that are weighted more toward commission than straight compensation. Considering how important a talented and motivated sales force is to a distributor, it might be time for some smaller companies to retool their compensation system.
The other obvious trend in our study was the concern over the cost of benefits. Gross premiums for health insurance increased at an average rate of roughly 12 percent. To combat those rising costs, many local distributors either decreased or discontinued the company match of retirement plans; changed co-pays or deductibles and passed along the cost to employees; or made greater use of Health Savings Accounts.
For a more-detailed discussion of the results of our study, or to request a copy, contact Senior Manager Steve Bailey or another member of the Barnes Dennig Wholesale / Distribution Client Service Team at 513.241.8313.