Journal of Compensation and Benefits
July/August 2009
by Vince Milich, Nancy Kirby, Kevin Coogan (an excerpt)
In April 2009, Hay Group published the results of a global survey of how compensation and human resources programs have been impacted by the global economic downturn. Of the 2000 companies in 88 countries that participated, over 500 were in the US. The results are stark, with merit increase budgets at historically low levels, salary freezes in place in many organizations, drastic cuts in short and long-term incentive programs, and reductions in benefits.
This article presents the results of the survey and discusses how compensation and benefit professionals can continue to add value in such a challenging environment. Using new approaches, repurposing some old tools, and with a dose of creativity, human resources professionals can continue to provide their organizations with opportunities to attract, motivate, and equip a talented workforce. The implications of the survey, and suggested actions for human resource professionals are provided in the areas of:
- base pay
- short-term incentives
- long-term incentives
- benefits.
Finally, this in an excellent time to consider repositioning total rewards in organizations and 'fix the mix' of the above elements, considering how they each need to contribute to an effective total reward framework for the company. Challenging times for the economy and most organizations makes for challenging times for human resources professionals. Our role is to provide the tools to attract, motivate, develop and equip a talented workforce. With small or nonexistent merit increase budgets and bonus pools, cutbacks in benefits, and drastic reductions in training and development, that is a hard mission to work towards. It is a time to do more with less and also a time to become more creative in the way we support the success of the business.
For more information
Vincent Milich, senior consultant in the reward pratice, Nancy Kirby, business process leader for reward information services, Kevin Coogan, US energy sector leader for reward information services.
