Tuesday, December 17, 2013

Questions Answer More Than Answers

I have a few questions that I love to ask in interviews. Most of them I don't care about the answers--I just care about the way the candidate answers the questions. But there is one question where I really am interested in the actual answer: "what questions do you have for me?" It may seem like a silly question to put so much emphasis on but the OnlineSpin blog from MediaPost agrees that can help separate a candidate--so they ask that question at the beginning of the interview:
In most cases, the response to that first question indicates within seconds how relevant, prepared and interested a candidate is. The questions a candidate pose signal to me whether I should expand the discussion or wind it down....I find that the questions a candidate asks -- and doesn’t ask --are often far more revealing than responses to questions I ask. A candidate’s questions are one of the best indicators of intelligence, reasoning and curiosity -- and the ability to frame and advance a problem with others.
As a young job candidate, I didn't take that question seriously--I thought it was just a filler at the end to ask questions about next steps and such. But then, as I started to interview others, I realized it was a great way to show how much the candidate really cared about the job--did they just Google the company beforehand or did they really work to get a full understanding of the company? Did they just have a precanned question for me or was the questions specific to the interview and, more importantly, the job and company? The ones who answered with the best question always got a leg up on the competition

Wednesday, December 11, 2013

Deck the (Office) Halls…Holiday Sensitivity and Celebration in the Workplace

In today’s multicultural workplace environment, holiday sensitivity no longer means simply putting a menorah next to the Christmas tree during the holiday season.  Observances such as Christmas, Hanukkah, Ramadan, Kwanzaa, and Bodhi Day should be considered. While world political tensions rise, religious sensitivity issues can rise too.  Employers challenged to show fairness, employee appreciation, and holiday spirit may be tempted to pull the plug on holiday celebrations altogether.  However, there are ways to celebrate the season in the workplace with sensitivity, understanding and respect.   

“Employers should strive to ensure that all of their employees’ unique cultural beliefs are equally represented and celebrated during the holiday season,” said Jennifer Loftus, National Director, Astron Solutions. 

There are a number of religious and cultural holidays that your employees may observe during the season.  In order to encourage understanding of each, they are listed here with a short description.

Christmas - The most recognized and celebrated holiday occurs on December 25, the day that marks Jesus Christ’s birth.  Over 3 billion Christians worldwide celebrate the holy birth by engaging in various customs and traditions, including singing, gift-giving, gathering with family and friends, and praying.

Hanukkah - “The Festival of Lights” celebrates the victory of the Maccabees, the rededication of the Temple of Jerusalem in 165 BC, and the miracle of the oil that burned for eight days.  During the eight nights of Hanukkah, candles are lit in a menorah, which holds nine candles: one for each night, plus an extra used to light the other candles.  In 2013 Hanukkah began on the evening of November 27th and concluded on the evening of December 5th. Hanukkah is celebrated by performing traditional songs, enjoying fried foods, gift-giving, and praying.

Ramadan - Ramadan, the ninth month of the Islamic calendar, celebrates the first revelations given to the Prophet Muhammad.  In 2013, Ramadan began on the evening of July 8th and ended on the evening of August 7th. Muslims fast during Ramadan, health permitting.  They do not eat, drink, smoke, or engage in sexual activity until sundown each day, using the daytime to concentrate on their faith, rather than on everyday concerns.  The fast concludes with feasting, gift-giving, and praying.

Kwanzaa - Created in 1966 by Dr. Maulana Karenga, a professor at California State University, Kwanzaa is a cultural, rather than religious, holiday celebrated from December 26 through January 1 by many African-Americans.  The word Kwanzaa is Swahili for “first fruits of the harvest” and involves gathering family and friends to discuss and commit to seven guiding principles.  Each day, a candle is lit signifying a principle - unity, self-determination, collective work and responsibility, cooperative economics, purpose, creativity, and faith.  A feast is held on December 31 for remembering, reassessing and rejoicing.

Bodhi Day - Bodhi Day is usually observed December 8th or the Sunday preceding it.  It celebrates the day of Prince Siddhartha Guatama’s realization and presentation to his fellow seekers of the Four Noble Truths.  From that point forward, he was referred to as the Buddha, the enlightened one.  Buddhists celebrate by stringing colored lights representing the numerous pathways to enlightenment, feasting on traditional foods and greeting each other with "Budu Saranai!" which loosely translated means, "May the serenity of the Buddha's be yours!" 

When preparing for holiday festivities, ask your employees for input during the planning process.  Encourage them to bring in decorations, and to share foods and holiday traditions. 

Be sensitive to any fasting, dietary restrictions or scheduling conflicts due to religious observance, prior to planning.  Don’t forget to offer vegetarian alternatives.

Make all holiday activities voluntary.  Not all employees may feel comfortable celebrating, or may not be able to join in according to religious beliefs.  Jehovah’s Witnesses, for example, do not celebrate holidays.  Non-participation should not be viewed negatively.  

It is recommended that office decorating guidelines be established ahead of time.  Singing snowmen or paper garland that hangs precariously close to a light bulb may prove to be more distracting and/or dangerous, than festive.  

Remember, your organization can be held liable for injuries that occur on your property or at your sponsored functions.  If you are planning on serving alcoholic beverages at your holiday party, it is wise to have designated drivers or a shuttle service in place prior to the festivities.  In addition, Mothers Against Drunk Driving (MADD) suggests that employers have a cash, rather than open, bar for alcoholic beverages, to help cut back on the potential alcohol intake of partygoers.  Also, be sure to provide plenty of fun seasonal drinks, such as non-alcoholic eggnog and hot apple cider, in addition to soft drinks and juices. 

Once your plans are in place, be sure to enjoy this time of year.  Providing your employees with the opportunity to mix and mingle is a wonderful way to increase workplace camaraderie.  When handled with sensitivity and respect, workplace festivities can result in an uplifting combination of unity, cultural understanding, and joy for your team, which is truly a celebration of the spirit of the season.

Thursday, November 28, 2013

Happy Thanksgiving!

As we watch the end of the Thanksgiving football games and eat the last of the dessert, we want to wish a very happy Thanksgiving (and Hanukkah). May this holiday and the entire holiday season be filled with family and joy. We are very thankful for you coming to read the blog and we wish you and your family a great rest of your holiday!

Wednesday, November 20, 2013

The Gap in the International Workplace

A few days ago we wrote about the multigenerational gap in the workplace for Astronology. As more companies fit into the mode of the global workplace, companies not only have to keep up with laws and policies related to employees internationally, but their different feelings toward work as well. As Marketwatch wrote, a GfK-Monster.com survey, says that gap can be quite significant:

"What is striking about the findings is that the strength of a country's labor market doesn't necessarily correlate with workforce contentment. While workers in challenged markets may have had fewer opportunities to advance in terms of promotions or salary during the recent downturn, it has not necessarily affected their happiness, "said Chris Moessner, Vice President for Public Affairs, GfK. "Clearly there are many variables when it comes to job satisfaction - for example, Canada and Germany have enjoyed buoyant labor markets, yet they lie at completely different ends of the happiness spectrum some of which could be driven by broader cultural differences between the two countries. More generally though, workers internationally want more out of their work and seem to have just settled for their current jobs." 
The issues lie not only in their attitude towards working in general but also their attitudes towards each other and how happiness is defined in those workplaces. In the US, money seems to be a big driver of happiness in the workforce but 22% love their job so much they would do it without being paid at all--or so they say. The most satisfied country with their jobs? India, which came in at only 5% who claim to dislike/hate their jobs. The key is to figure out what makes them like it as much as see if that can be distributed across the different countries in your workforce. If not, figure out what makes people happy in each country and work towards that--even if it means slight unevenness across offices.

Tuesday, November 19, 2013

Other Soft Skills a Need Too

Earlier we talked about how communication skills are lacking for many job candidates and are hurting organizations, but TIME says that it's not just communication skills that are lacking, but a lot of other soft skills as well including critical thinking, creativity, collaboration, and interpersonal skills:
As much as academics go on about the lack of math and science skills, bosses are more concerned with organizational and interpersonal proficiency. The National Association of Colleges and Employers surveyed more than 200 employers about their top 10 priorities in new hires. Overwhelmingly, they want candidates who are team players, problem solvers and can plan, organize and prioritize their work. Technical and computer-related know-how placed much further down the list.
So while many state cirriculums are focused on the math and sciences, maybe another focus would be better. The one thing that college curriculum need to focus on, however, should be internships. Schools like Northeastern have seen a jump in applications due to their co-op program but maybe other colleges should take a look at doing so:
One thing that does appear to make a difference is internships...more than 80% of employers want new grads they hire to have completed a formal internship, but only 8% of students say interning in a field related to their major is something they spend a lot of time doing....Overall, only about half of college grads say they’re prepared for the workplace — and the number of bosses who think they’re prepared is lower than 40%.

Among students who don’t intern, only 44% consider themselves ready for the job market. That improves for students with unpaid internships; 58% say they’re prepared for the workplace. But among students who complete paid internships, that number jumps to 70%.

Part of the problem is that you don’t know what you don’t know, as the saying goes. Harris Interactive found a huge gap between students’ perceptions of their abilities and managers’ perceptions of those same skills.
Just some food for thought...

Thursday, November 14, 2013

Good Communication Skills Can Go a Long Way

My question to the applicant was "tell me what you know about our company." It's a simple question with a layup of an answer in that I didn't expect this applicant to know anything about what we do. It was just to see how they answered it and how good their writing skills were--instead, I got this:

"I know that your involved with insurance"


Let's just say that the job applicant didn't get the job. But this wasn't just an isolated incident of myself, as hiring manager, acting like a grammar nazi--this is a prevalent theme among job applicants (and their rejections) according to CNBC. And it's not just anedoctal evidence such as the one I just provided:
In a 2011 survey of corporate recruiters by the Graduate Management Admission Council, the organization that administers the standardized test for business school, 86 percent said strong communication skills were a priority—well ahead of the next skill. (When recruiters were asked in a separate question what changes business schools should make to meet employers' needs, the recruiters overwhelmingly called for something different: practical experience.)
The good news for job applicants is that the working world is starting to provide more training for those who may be grammatically disinclined--or just bad at communication in general. One workforce management consulting group quoted in the article said that they've seen an "increase of 20 to 25 percent in the number of clients investing in career development for employees, including improving their communication skills."

This is not just good for employees looking for their next position but for those people in the jobs they currently have--even if they're not client-facing. Many coworker-to-coworker issues can be improved with better communication skills and sometimes better training is all that is needed to fix that. With more companies willing to invest in that, it will not just make for better employees and better future employees, but a much more cohesive work environment as well

Tuesday, November 12, 2013

Making the Most of a Multigenerational Workplace

In today’s workforce, there are many angles to diversity. One area of particular interest is the multigenerational gap. Such diversity can be beneficial to organizations, and also challenging for any HR Representative to handle. In this issue of Astronology we examine the topic of multigenerational staffing.

In its section on generation-gap staffing, the Department of Defense website notes, “Just as financial experts tout portfolio diversity as a hedge again economic uncertainty, generational diversity is important to sustain stability and stimulate innovation in a multi-functional workplace.” Any group of employees has its strengths and weakness.  However, some of their concerns will certainly be different.  It is important that all employees feel valued by and included in the organization. These feelings will encourage employees to feel welcomed to share their perspectives, making teamwork easier.

What are the Concerns of the Generations?

Baby Boomers, Generation X, and the Millennials. Each of these groups has defining moments that have shaped their views of the world and their values in the workforce. The chart below explains:

Baby Boomers
Generation X
Generation Y
Shared Defining Events in Life
·   Berlin Wall existence
·   JFK, MLK, and RFK Assassinations
·   Watergate
·   Vietnam
·     Falling of the Berlin Wall
·     Challenger Disaster
·     OJ Simpson Trial
·     First Gulf War
·     Terrorism Attacks on American Grounds
·     Global War on Terrorism
·     High School / College Shootings
·     Corporate Scandals

Key Values
·   Fulfillment
·   Indulgence
·   Balance
·   Equality

·     Freedom
·     Reality
·     Self-Reliance
·     Work / Life Balance
·     Diversity
·     Flexibility
·     Empowerment
·     Service-Oriented

Employers should avoid keeping stereotypical views of workers strongly alive in the workplace.  Instead, what do you do to enhance the best in your employees, while keeping in mind the background to each generation? Three simple steps can assist in achieving this goal:

  1. Open Communication: Make employees feel as though their opinions and perspectives truly matter. When change occurs within the organization, make sure all are aware. Encourage employees to communicate with each other in order to bridge the gap between different generations.
  2. Active Interaction between Managers and Employees: Managers should be able to communicate to employees that they view their dedication to work as valuable. Provide different assignments that challenge while maintaining individual interests. For example, Generation Y employees are notoriously known for their quick grasp of technological advances. If your organization is looking to expand or find creative solutions that involve forward moving with technology, why not involve Gen Y employees in team meetings? This will allow them to feel involved in subject matter they may find interesting, while allowing current leaders from other generations to identify where they can possibly nurture the employee. 
  3. Continual Review of Employee Satisfaction: Under30CEO.com remarked that: “85% of the workforce wants to be provided the opportunity to continually improve and grow. This is not new. The difference today: If employees are not learning and growing, they are leaving.”   So how do you ensure that your employees feel like they are growing and learning? Quite simply…ASK them. Some employers feel the annual review is the perfect time to find out how an employee feels about his / her work achievements and progress. Others find creating an employee survey and conducting it at a separate time from the annual review works best. Still others create an environment where employee engagement is so high that employees feel comfortable speaking up at any point when they feel like they aren’t being challenged enough.

Overall, as long as employees are happy and feel accomplished at work – irrespective of their generation – they will continue to give their best to their organizations.  A multigenerational workforce can bring great success to any organization when employees receive active communication and recognition.  Astronology has a question for you, however.  What challenges do you see in your organization with multigenerational workers? What are you doing to overcome these challenges?  We look forward to hearing your stories and insights!  Please share them with us today!

Thursday, November 07, 2013

The Lonely Commuter

The office environment seen on television shows people carpooling on their way to work and then working in large office environments with tons of collaboration and teamwork. Unfortunately, that's not totally indicative of how most US companies work, and, most startling, how most commuters get to their place of work. So how are they getting to work? Public Transportation? Biking? Unfortunately, despite attempts to make those more appealing for workers, neither according to the Wall Street Journal: it's commuting, and most of it is solo.
Credit: WSJ
Last year, about 76% of workers 16 years and older drove to work alone—just shy of the all-time peak of 77% in 2005, according to data from the Census Bureau's American Community Survey. Driving alone dipped slightly during the recession, but it has been ticking back up as the economy revives.

Meanwhile, just about every other way of getting to work has either languished or declined.
The one big uptick shown has been in people who work from home. Technology has allowed for more of Americans to be able to do this and despite a few high-profile CEOs objecting, the trend has certainly increased as time has gone along. I was one of these "telecommuters" for the past 10 months, helping to add to the national number of 4.4% of Americans who work solo.

So what does this trend show and what does it mean? Well the solo commuting is really bad for people who are trying to save the environment and solo working is bad for those offices trying to build camaraderie. But the growing trend is that people are living further away from where they work and they need to either go into the office alone or stay at home alone in work. With 45% of Americans not able to access public transportation, the choice isn't always easy. But as telecommuting becomes more popular, the hope is that the commuting alone numbers start to decrease a bit and the office-place doesn't suffer as a result

Wednesday, October 30, 2013

Is There Financial Literacy in Your Workplace?

It’s not difficult to see that some Americans make poor financial decisions. We’ve been bombarded with reports of the so-called sub-prime mortgage credit crisis--mostly because borrowers didn’t fully understand what they were getting into and the possible consequences. Depending where you are, you see ads for “car title loans,” Payday loans, and “refund advance loans” on your anticipated income tax refund. All of these incur, on an annual basis, astronomical interest rates, but are sold as putting cash in your pocket for “just a few dollars.” What about the person who accepts paying a $2.50 fee to withdraw $10 from an ATM once a week?

This situation has attracted the attention of high levels in our government. The Federal Reserve Bank of Kansas City has highlighted both the need for and the benefits of financial education conducted in the workplace. President Bush has recently formed an Advisory Council on Financial Literacy, appointing Janet Parker, SPHR, to the Council. Appointing the chair of SHRM to the Council clearly signals that the HR profession belongs in this national discussion. What is consistently seen as a tool to address the financial illiteracy concern is some sort of Financial Education in the Workplace.

Indeed, if financial education in the workplace is a part of the solution to this problem, HR professionals, as the stewards of employee education, will be in the forefront of the effort. Whether expressed as “financial literacy,” “financial education,” “financial stabilization,” or a catchy, easily-turned-into-an-acronym name (such as “Consolidated Approach Simplifying Handling Money, or “CASH Money”), employers on the leading edge of addressing this issue will become employers of choice.

What does your organization’s program look like? Is it truly literacy? Merely “education”? Voluntary brown-bag lunch-and-learn sessions? The minimum required by law (e.g., ERISA)? If this has been your program for a long time, and your employees are still in financial straits from poor decisions because today’s financial world is much more complicated than it was 10 or 20 years ago, don’t you think you need a change? After all, as the joke goes, doing the same thing over and over expecting a different outcome is akin to insanity.

So what does work? Let’s look at an allegory that you probably already have in place--your “health and wellness program.” It usually consists of health education, building an exercise plan, stopping smoking programs, and providing a time and place to exercise, sometimes at the workplace, sometimes a reduced membership fee at the gym. Change some of those words around and you have a financial wellness program: providing financial education, building a budget, stopping over-spending programs, and providing the access to real-world experts who can make the “financial exercise” actually pay off. As can be said, “learning about aerobics, studying the physiology of exercise, and knowing you should go to the gym” does not make one physically fit. You have to actually do the dieting, aerobics, workouts, that is, one must change one’s behavior to make it work.

The same is true for financial wellness. “Brown-bag seminars” alone will not get your employees on track with managing their financial affairs. It’s getting them to change financial behavior that does it. Sometimes it’s necessary to set up the conditions for your employees to get smarter and to change (for the better) what they do with their money. Setting them up for financial success can be as important to your organization as setting them up for professional success.

“Sure, but what’s in it for the organization?” Great question. If there’s a payoff, it makes even more sense to do it. The bottom line matters greatly. So, let’s turn the question around a bit. Is it worth something real to the organization if:

• Your payroll administrators have fewer garnishments and other legal actions to process?
• Your retention improves because employees return the loyalty shown “down” from management in helping them to take care of difficult matters?
• Your employees’ participation in tax-advantaged retirement plans (such as 401(k) plans) increases?
• Absenteeism is reduced, because your employees feel stronger loyalty and (surprisingly) are healthier?
 Employee theft (“shrinkage”) is reduced because of the improved loyalty?
• Overall productivity improves because employees are at their jobs more, instead of missing work to handle legal issues, for example?
• Overall productivity improves because employees are more focused on their work, instead of worrying about their financial woes?

The following two hyperlinks bring you to results from research conducted by independent researchers and The Federal Reserve Bank of Kansas City. Is there any reason to believe that your organization would be that much different from those in the research? Would you like to be known as an employer of choice because of all the personal, valuable, financial literacy you give to your employees, or just another organization who does only the mandatory one-hour lecture on the retirement plan?

Notice that this whole concept is independent of whether employees are exempt or non-exempt, professional, technical, skilled, or unskilled. Certainly, there is more for the organization in ascertaining if participants in the financial literacy benefit are likely to be retained--but success in the program can be a big motivator for those considering leaving the organization. It’s also independent of income level--six-figure-income employees can and do make poor financial decisions as well as entry-level ones, and often with bigger dollar consequences.

The research is done, and there’s plenty of it--improving the financial literacy of employees brings tangible benefit to both employers and employees. Why not do it in the workplace, where the link between the employer’s goals and the individual employee’s goals merge. The cutting edge is there. Will you help take your organization there?

Richard L. Virgilio, SPHR, is a retired Navy submarine Captain, a former study leader and analyst for The Johns Hopkins University Applied Physics Laboratory, and independent HR consultant. (rlvirgilioga@yahoo.com )

Monday, October 21, 2013

Privacy Goes Both Ways

In 2013 there are are lot of ways that people and companies purposefully violate their own privacy. People bare their lives on social media and are more than happy to publicly post information that probably should be kept private. Companies like to drop hints of private information to drum up interest in their next product release or to test out potential idea. It's not uncommon for both to be good things and bad things all at the same time.

But sometimes, it's not such a good thing. I started to think about this concept when reading this Deadspin article about whether athletes deserve more privacy in their injuries. It's a fair question as opponents' strategy can be altered and future earnings could be diminished, but with fantasy leagues and Vegas betting and 24/7 sports coverage, it's hard to keep it out of the news. But there are other concerns as the author of the article writes:
Professional athletes often have their privacy trampled on in the name of public discourse and the team press release. As a sports fan, I've never once stopped to think that this is strange or unfair. Yet as a physician, I'm familiar with the Health Insurance Portability and Accountability Act (HIPAA), and recognize the importance of the safeguards surrounding patient privacy. But professional teams often create their own HIPAA exemptions through the use of contractual waivers that allow team doctors and trainers to release private medical information to coaches, front office personnel, and owners. The waiver often allows the team to make certain injury information public, which makes many of us uncomfortable
It does and it doesn't. That athlete has the same ability to leave the team and talk about private details including signs and special plays and maybe even injury issues that may not be public.

This is not only in the sports world--employees sometimes violate the privacy of the company their leaving in the real world too. The Wall Street Journal has some gory details about that including the sad fact that nothing has to be printed out or written down anymore--as employees can just upload information to the cloud and be on their way. There is one way that HR Professionals can be ahead of the curve on this, however:

It's crucial that IT security managers communicate with the human-resources department so they are aware of pending layoffs or other personnel issues that might lead to employee departures. "The simplest thing companies can do is to make sure there is a good communication path between human resources and IT security staff," says Patrick Reidy, former chief information-security officer at the Federal Bureau of Investigation, who now holds the same post at Computer Sciences Corp.
Or else it could be your company's information that a former employee is posting on social media...and that could be really, really bad

Wednesday, October 16, 2013

Looking to 2014 – Trends in Compensation Planning

Writing an article on 2014 compensation trends in the midst of a government shutdown and its potential devastating impact on the economy is risky. The possibility of slipping into another recession in early 2014 is real, which would alter all current projections dramatically.  However, organizations cannot face the coming year “on hold.”  As such, we consider the future with a cautious eye to the news.
In planning for 2014, many data sources are available.  To facilitate our readers’ 2014 strategy development, the following is an executive summary of research, reprinted with permission, conducted by Diane Lustenader, SPHR of Lake Associates, Inc.
2013 Actual Data
US Bureau of Labor Statistics reports actual wage increases over prior 12 months of +2.5%; Surveys report actual 2013 merit increases averaged 2.8-2.9%, all industries.  Inflation YTD = 1.5% so real effect of wages for most employees = +1.0%; +0.7% for hourly workers.  Average structure increase in 2013 was + 2.0% based on review of surveys.  Merit differentiation in 2013 (raises based on performance) ranged from 0% to 9.0%.  The typical differentiation for top performers compared to average performers is a factor of 150% - 200% (i.e. if average raise = 2.9%, top performer average raise = 4.35%-5.8%).  The use of variable pay programs continues to trend upward as a tool in talent acquisition and retention.
2014 Merit Increase Average Forecasts
All Employee Groups, All Industries (merit + non-promotional increases) = 3.0%
Projections by Employee Classification - Production = 2.92%; Office, Clerical + Technical = 2.93%; Exempt = 2.96%; Management + Executives = 3.08%
Merit Differentiation for performance forecast from 0% to 4.6%, similar to 2013 forecast; note actual 2013 data trended higher for top performers
Hot Industries 2014 Oil & Gas 4.1%, Energy 3.5%, Entertainment 3.4%
Hot Jobs 2014 – medical, information technology
Lagging Industries 2014 – Not-for-Profit 2.4-2.8%, Public Administration 2.6%; Transportation & Warehousing 2.6%, Education 2.5%
2014 Promotional Pool Budget = 1.0-1.3%; average promotional raise forecast = +8.0%
2014 Salary Structure Adjustment = 2.1%
2 years, 2013 + 2014 combo adjustment = 4.1%
2013 Competitive Positioning – Most surveys predict that 2014 will be a year of significant flight risk for all employees, especially for top talent.  Approximately 86% of companies target the 50th percentile (P50) of the market for the competitive midpoint of their grades and ranges.  For officers/executives that number is 76% with 11% targeting the 75th percentile (P75).  Less than 5% of companies do not have a competitive positioning philosophy.
2014 CPI Forecast = +1.4%
Unemployment Forecast = 6.8% (much speculation abounds re. impact of government shutdown and debt ceiling debate on this number)

Let’s put this data into perspective.  The following tables are from the Congressional Budget Office, on budget surpluses and deficits since the year 2000, and the Consumer Price Index:
(in millions of dollars)
Surplus or Deficit (–)
Surplus or Deficit (–)
Surplus or Deficit (–)
2013 estimate
2014 estimate
2015 estimate
2016 estimate
2017 estimate
2018 estimate

The national deficit will continue to grow, placing more pressure on the need to increase government revenues.  Yet unemployment will continue to hover around 7%, meaning less tax revenue for the government to count on.  As we have heard in the news the past few weeks, “something has got to give.”  Inflation is holding steady at 2% during 2013 and is predicted to remain as such, or even drop in 2014.  The earlier fears of “hyper-inflation” in 2014 have dissipated. This leads us to a reality check against the data provided by the major consulting firms and compiled by Lake Associates.  Based on discussions with Astron Solutions clients across the country, from differing industry segments, the following can be said as we begin planning for 2014:
  • ·         Clients are focusing on a range of 2.8% - 3.2% in their 2014 compensation budget planning, with an average of 3%.  This includes all adjustments to compensation, such as general increases, as well as merit, promotional, and market adjustments.
  • ·         Clients are taking a hard look at their centralized compensation systems and moving towards more decentralized models. Such models allow them to make budget decisions based on families of jobs, and prioritize based on the mission critical nature of the positions. This can result in some positions having pay being frozen while others receive adjustments.  This also means increased pressure on developing alternative rewards programs for positions not included in the adjustment.
  • ·         Clients are starting to take a hard line in holding pay to the established maximum of the pay range with no adjustment, even a flat dollar amount, until the employee’s pay is below the maximum.  This requires establishing programs to better recognize the long-term employees beyond just a pin or recognition certificate, as this population will be most impacted.
  • ·         Clients are also aggressively establishing career progression programs that allow them to reduce the actual start rate below the market going rate.  The organizations then shift these dollars to fund training programs and recognition rewards for those who have mastered their job and exhibit high levels of competency and the ability to take on highly complex job tasks.
Compensation planning for the coming year is always a delicate balance. With the current economic uncertainty, however, formulating a strategy is difficult.  Employers effective at attracting and retaining key talent, however, will utilize multiple approaches that enable them to provide fiscally conservative total rewards packages while still engaging the human capital that drives the organization forward.

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