Prepping Employees For Wage Freezes
Only 43% of U.S. companies expect to provide compensation increases in 2010. In addition to the wage freeze, 37% of companies say they plan to cut benefits. The Society of Human Resources Professional quotes a Careerbuilder survey. The association said that even during the height of the recession last year that 65% of companies provided compensation increases and only 32% planned to cut benefits.
That’s a 12% decrease in companies offering raises during 2010.
And a 13% increase in companies cutting benefits.
On top of this bleak employee news is last week’s 2% increase for federal government employees.
If you haven’t yet spoken with your employees and been transparent about whether there will be increases this year, that should be a priority this week. Mainstream media continues to talk about a jobless recovery, but media reports can’t shoulder your burden.
If you’re not giving employees a pay increase during 2010, part of being a responsive employer is telling them now.
Cynics will note that the true jobless rate is over 17% while reported unemployment is 10%. That means many employees likely won’t leave over compensation issues. As a small business owner, you need to be blunt, but kind. You’ll need talking points about when you anticipate restoring compensation increases. At a minimum, your accountant and attorney should be involved. If your organization is big enough to have a HR professional, put that person on the case today with a draft due to you by Wednesday so you can make the announcement Friday.
Staying quiet is an unacceptable form of avoidance for any organization, much less a small business in the midst of a horrible economic downturn.
