Blog Archive - November 2009

Go to an IT or facilities staff in most organizations and ask for an inventory of the organization’s hardware. Assuming that it’s a well-run outfit, you’ll receive a list of the number of computers, photocopiers, fax machines and other hardware that’s owned or leased by the business.


Now ask the HR staff in the same organization for an inventory of the competencies of all of the company’s employees. Guess what? Many organizations wouldn’t stand a chance. They wouldn’t be able to produce an accurate, up-to-date list of people’s competencies, and they wouldn’t know where to start.

Yet what’s more valuable to the organization, its hardware or its people?  Have a look at the P & L sheet and check what costs the organization the most – people or hardware? And yet many organizations know far less about the competencies of their workforce than they do about how many lumps of plastic they have lying around the place!

At one point during the Salary.community London User Meeting, I was seated between two global compensation managers. One represented an organization of less than 200 employees, the other, more than 40,000. You wouldn’t perceive this magnitude of difference from their conversations, because they shared precisely the same challenges.

Their top concern was the same: how can their organizations do more with less while trying to retain their best employees. And their engaging conversations revealed that they were tackling the same issues, just on different scales:

The news has been full of stories that have undoubtedly left compensation pros scratching their heads. Some headlines have included:

In the face of record-breaking profits, and the payment of commensurate bonuses, Goldman Sachs CEO Lloyd Blankfein has “warned his employees to avoid making big-ticket, high-profile purchases.”

Chafing under new pay restrictions proposed by Pay Czar Kenneth Feinberg, Citibank recently sold Phibro, one of its few profitable businesses, simply to avoid paying a $100 million bonus to star trader Andrew Hall.

AIG allowed Joseph Cassano, the head of AIG Financial Products, whose business unit lost hundreds of millions of dollars in credit default swaps, to keep living in the company's luxurious London house, and gave him a nine-month consulting contract for $1 million a month for much of 2008.

Our last Salary.community meeting was hosted in London last week. I’ll admit, I’m a bit sad. I'm tired and relieved too, kind of like how it feels after your last party guest leaves for the night. The preparation beforehand can be lots of work, but seeing the party go just as you had planned makes it worth all that went into it.

In the end, no matter how much you plan every moment, it is the unplanned events that make your day special. Though we arrange for a full agenda of presentations and roundtable discussions, we understand the importance of unstructured networking time. User groups, professional associations and other organizational  meetings are a great opportunity for HR professionals to leave the office and talk to other professionals about the problems that they are facing in their organization.

Just back from sunny London (yes, you heard me right, sunny!), where we held our annual user meeting for Salary.com’s UK and European customers. It was a great chance to reconnect with our customers and hear the unique challenges they face as they address and manage  global compensation in a volatile economy.

We opened the day with a keynote presentation from Robert Ward, director of global forecasting for the Economist Intelligence Unit, who managed to make us laugh when he encouraged us to have more babies as a means to a stable future economy, even as delivering the prediction that the recovery will be a slow one – noting that living standards aren’t likely to reach pre-crisis levels for many until beyond 2013, even in developed nations. The remainder of the day was devoted to a number of other topics that are critical to global comp practitioners – the financial reality of expat assignments, perspectives on outsourcing to India, China and Vietnam, and a discussion of how compensation teams will respond to the upturn in the economy.

What discussions have we been having within our organizations regarding the tide turning on the recession? Are we ready?

I recently heard an analyst declare that when the recession ends, we will be looking at turnover in organizations of upward of 40 to 50 percent of staff. Again, are we ready?

During the economic turndown, we have been hearing about all of the cost savings initiatives being put in place. Strategies such as pay cuts or wage freezes, benefit reductions, and reductions in staff.  What plans do we have in place to address these initiatives? Remember employees don’t forget these “temporary initiatives." Are we ready?

For all the extremely useful, high-quality salary surveys that are out there in the marketplace, there are quite a few poor-quality sources being used by HR or compensation professionals every day. In a previous post, Walter  talked about how the quality of participants is what ultimately makes a good survey, but there are a number of other factors for practitioners to consider when purchasing and using salary surveys. The following is a list of criteria that should be met by each and every compensation survey that you use.