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Non-Profits Offer Lessons on Employee Compensation

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Small businesses struggling to hold onto good employees might take a cue from their not-for-profit (NFP) counterparts that are increasingly rewarding loyal employees with paid time off rather than raises.

More than half of NFPs recently are starting to take into account an employee’s years at the company to determine vacation, personal and sick days in every position from entry-level workers to top executives, reveals the Compdata Survey study of pay)) data, benefit information and CONLINK|45|pay practices.

“In retaining top employees, many organizations are finding enhancements to time-off programs may be a viable alternative to granting pay increases,” said Amy Kaminski, director of marketing for Compdata Surveys, which this month released the 2010 Compensation Data Not-for-Profit study.

“Until effects of the economic recovery can be felt, it will remain important for companies to be creative and make the most of their compensation budgets,” Kaminski said in a statement.

The findings show exempt employees – workers who do not receive overtime pay – with less than one year on the job earn an average of 7.7 vacation days. Nonexempt employees accrue 6.7 days.

Exempt employees with five years under their belts average 15.8 vacation days compared with workers who get 19 days for 10 years on the job. Employees with 20 years of service have 21.7 vacation days, according to the data on more than 100 industry-specific job titles and more than 250 benchmark titles ranging from entry-level to top executives. Exempt and nonexempt employees are granted an average of three personal days and 11 sick days per year.

Not-for-profit organizations generally allow employees to carry vacation days from one year to the next, but 85 percent of the respondents limit the number of days that can be carried over. The survey results show exempt employees can transfer an average of 29.3 vacation days while nonexempt employees can carry over 28.6 days.

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