Blog Archive - August 2009

This year’s compensation surveys are starting to hit the market, and many compensation and HR professionals are beginning to look at and use the data. When using these surveys to evaluate and set pay, one factor to consider is how to age the data from the survey’s effective date.

Safe harbor guidelines call for survey data to be at least three months old before it can be published; realistically it can be five to six months after the collection period before the data finally comes out. In order to bring the data to the current time period, organizations will apply aging factors based on the effective date of the survey.

Earlier this week, Joe Kilmartin and I presented at the HR Florida conference in Orlando, Florida. It was a great conference with strong attendance, and we had a really nice time attending it. We had the coveted after-lunch time slot, where a successful session is just about keeping people awake.

Our topic was about salary surveys in the current economy, and the session was well received. But as always happens, whenever we get in front of a group of people, the focus turned to compensation data sharing and survey safe harbor guidelines.

We are constantly amazed at how little people know about what they can and cannot do when sharing compensation data. Good, smart HR people simply haven’t had the appropriate training and innocently violate the guidelines, putting themselves and their organizations at risk.

HR professionals really need to educate themselves on what is appropriate when sharing compensation data. And we'll be sure to cover safe harbor guidelines in more detail here on Salary.com HRVoice.

About 2½ years ago, I was in my senior year of college worrying about whether I’d have a job before I graduated. As I look back on that time, I can’t help but wonder how 2009 graduates are coping with the current economy. The stress I felt my senior year is probably nothing compared to what current grads are feeling. When I graduated, there were job opportunities practically everywhere, for everyone. Now, the job market is grim, very grim.

According to the National Association of Colleges and Employers (NACE), less than 20 percent of 2009 graduates who applied for a job actually have one in hand, compared to over half a graduates back in 2007. What’s even more discouraging, NACE reports that employers expect to hire 22 percent fewer new grads this year than last year.

With my own student loans to pay off, I can’t imagine facing such a bleak outlook. And while I feel for the unfortunate unemployed graduates of 2009, I’m also concerned about the organizations who aren’t hiring them.

New graduates bring with them a desire to learn and excel. They have energy and fresh ideas, and are anxious to apply their newly acquired knowledge. What I wonder now is how this dip in hiring will affect organizations. Companies will certainly feel the heat loss that comes with fewer new graduates contributing to the workforce.

There is a lot of excitement here at Salary.com. We are in the midst of our first ever user meetings, dubbed Salary.community. So far we’ve had very successful meetings in Boston, New York and Chicago and are looking forward to meeting clients in San Mateo, Singapore, and London.

Our agenda features five different tracks covering compensation, competencies, payroll, talent management and IPAS. When I ran into a client of our survey management tool attending a session on competencies, I asked her about her decision to skip the composite building session.

“I’ve been in comp for years, and I’m comfortable with the decisions I make about blending surveys, but I don’t know anything about competencies and I have no other venue to learn about how companies use them.”

And that’s what these meetings are about: an opportunity to network and get educated on HR best practices. I hope to meet many others next week who similarly take advantage of our daylong agenda and learn something they didn’t know already.

When I strolled the tradeshow floor at this spring’s American Payroll Association Congress, I took a good look at many of the service providers’ offerings. The booths were snazzy, and the Live Strong, flash drive, arm-band giveaways were nice. But when you got into most of the Web-based payroll applications, they were…well, boring.

Don’t get me wrong, they’ve got all sorts of important earnings, deductions, tax and employee data in their super cool .NET, SQL brains. But unless you have a degree in payroll from MIT (which they weren’t offering), the usability and intuitive nature of the apps were next to non-existent. Why do payroll service providers do that? So payroll people can have job security? Or because they’re trying to show you how payroll and taxes are really, really, really sophisticated and difficult to understand. Sorry, I don’t buy it. And nor should you.

When I was going through my executive compensation headlines today, I happened upon the headline "Lockheed Seeks Feedback on Executive Compensation" from the Binghamton Press & Sun-Bulletin. I clicked through, thinking that it would be a standard announcement of a proxy proposal outlining implementation of say on pay.

On the heels of The US House of Representatives passing the bill H.R. 3269 'Corporate and Financial Institution Compensation Fairness Act 2009’ on July 31, there is even more pressure for non-TARP companies to adopt the non-binding advisory vote as a best practice.

When I clicked through to the article, what I found though was not a say-on-pay proposal. Lockheed Martin has announced that it is conducting an online survey of shareholders to obtain feedback on its executive compensation practices. The survey will then be reviewed by the Management Development and Compensation Committee of the Company's Board of Directors. 

Do we speak the language of our customers and associates? I was reminded of the importance of this after watching a 2005 movie about the oil business starring George Clooney, Syriana.  There’s a poignant scene where one character notes that the Chinese were the only foreign associates who bothered to learn the language of their Middle Eastern business partners.

What about us? In the HR and payroll arena, do we speak the language of our associates, customers and employees?

Get ready. As we contemplate the impact of change, and the new world order of $3.55 trillion budgets with $1.75 trillion deficits (four times the largest in history!), one can’t help but wonder how that will play out in the stodgy world of the HR and Payroll department.

Regardless of whether you subscribe to a red or blue state of mind, I think it’s a healthy exercise to consider how we will ever pay for such fiscal largesse on a going-forward basis. With the recent pronouncements of the Chinese and Russian governments indicating that they may be less willing to pay off our deficit spending, I think it’s important to consider what that may mean to employers and payroll taxes during the next 10 years.

Many companies are reassessing their talent management strategies in light of the financial crisis. Priorities and messaging are often being reconsidered and reworked. As you think about your talent management strategy in 2009, take this opportunity to test your strategy in the following ways:

1. Have you defined clear objectives for talent management? – What does your company want to achieve from these programs, processes and technologies? It is striking how many companies are not able to answer this question and this is the time to gain clarity within HR and with your leadership team on this topic. While your objectives do not necessarily need to be business-changing, the desired outcomes should be clearly understood and measurable. Also, don’t let compliance become your objective. Getting everyone to complete the process is a reasonable measure of one aspect of a program, but it’s not the reason for having a talent management program, or a compelling message when describing it.

Too often, and especially nowadays during these most challenging economic times, I hear of companies that are foregoing a formal performance review process for one reason or another. In nearly every case, the rationale for doing so is that they: