dangletech

As CEOs, Boards, and Chief Human Resources Officers focus on remaining productive and profitable while retaining key contributors to the business, they are thinking creatively and responsibly with respect to compensation practices. Here are some of the approaches being utilized, which span industries and may, if your firm too is looking to retain people and yet spend cautiously, wish to consider:
1. 20% of firms in the mini-survey have frozen salaries across the board for 2009.
2. 20% of firms in the mini-survey have frozen salaries for executives and/or management and have offered other employees increases averaging 2-2.5% for 2009.
3. 10% of firms with unionized employees have either negotiated salary freezes for these unionized employees (in concert with other employees) or where unionized employees
received negotiated increases in advance of non-unionized employees, are now asking the unions for permission to have these rolled back so that a uniform salary freeze can be imposed.
4. All firms who’ve already set budgets for 2010 (or are in the process of finalizing these), which is some 30% of the firms in the mini-survey, are looking to provide average increases of between 3 and 4% for 2010.

Other firms, not part of this mini-survey have taken different creative steps, including reducing base pay by 5-10%, and offsetting the reduction in base with higher potential bonus pay-outs, if revenue and operating profit goals are exceeded, or with equivalent value in the form of stock options and RSUs.

The laudable end goal for all of these firms is to avoid cutting staff, or to keep staff cuts to a minimum, for the planned recovery. It turns out that many firms are operating without much excess staff, and so any cuts risk negatively impacting core productivity of the Company.