"Managing Compensation in Tough Economic Times"

Phil Blount, President of Phillip Blount & Associates, recently presented a workshop titled "Managing Compensation in Tough Economic Times" at a SHRM-Atlanta PEG. With over 2.5 million job losses in the U.S. in 2008, and almost as many expected in 2009, this was a very timely topic. Merit increases are frozen or significantly reduced. Bonuses and incentive pay are low or nonexistent. However, organizations must ensure that they retain the critical top talent needed to navigate through these times. Furthermore, when the economy does begin to recover, it is essential that this talent has incentive to remain with the company. Some actions being considered by companies are listed below.

* Reducing and restricting on company travel and expense
* Implementing a hiring freeze
* Reducing training budgets
* Conducting benefits audits to identify possible areas of savings (and issuing benefits statements to remind employees of the actual amount they receive)
* Increasing employee contributions for health coverage
* Reducing and eliminating 401(k) and 403(b) matches
* Adopting furloughs and reduced work weeks (but be careful about the impact on exempt status employees!)
* Instituting temporary pay cuts
* Eliminating perquisites
* Offering voluntary retirements or sabbaticals

As companies consider adopting any of these strategies, it is important for the organizations to understand both positives and negatives for each action. Communication with employees is a key to maintaining engagement and retaining talent. While HR must play an integral role, executive leadership must be present and provide an example. If the organization takes a targeted, thoughtful approach, it can minimize negative effects and capitalize on opportunities to make the company competitive.

Cathy Missildine-Martin, Co-Founder and Director of Human Resources and Planning for Atlanta-based Intellectual Capital Consulting, has written a blog on this topic. It can be found by clicking on the link on the upper left hand side of the page.

If you would like to speak with Phillip Blount & Associates about this topic, or if you would like us to make this presentation for your organization or association, please feel free to contact us at 770-232-1232.

Phone: 800-501-0345
1745 North Brown Road
Suite 180
Lawrenceville, GA 30043