But, there’s always a caveat emptor quality to a lot of this research. That’s because you never really know how well the survey was set up, whether the questions seemed to have some bias and led respondents to certain answers, or even if the group surveyed was really one that would generate a meaningful result.
And there’s something else as well: Sometimes people aren’t completely honest in their responses, even in anonymous research. For example, I’ve been seeing a number of surveys indicating that lots of businesses are poised to bring back salaries and wages that have been cut or rolled back this year, but that sounds a lot more definitive in the surveys than it does when you talk to real executives about their plans.
Could it be that no one wants to admit, even in an anonymous survey, that 2010 is going to be another bad year of holding down pay?
So, that’s MY caveat emptor to these two surveys that seem to be directly contradicting each other. See what you make of them:
According to the survey, more than 80 percent of the respondents say their companies are headed in the right direction, while only 15 percent think things are headed the wrong way. Nearly nine in 10 employees believe conditions will be better or the same a year from now, and only 12 percent say they will be worse.
In addition, respondents to the survey report very high levels of job satisfaction, with nearly 80 percent saying that they are extremely or somewhat satisfied with their current jobs, while only 9 percent are extremely or somewhat unsatisfied. Given the choice, nearly 90 percent of the employees say they will be at the same job six months from now. The employees cite job security, stability, pay and benefits as the primary reasons for their satisfaction. The survey was carried out among a cross section of 500 U.S. full-time workers who have been employed for at least one year at companies with 100 or more employees.
“The study provides a barometer of employee engagement in the workplace, with results that might alarm and surprise many employers,” said Douglas J. Matthews, president and COO of Right Management, in a press release. “Employees are clearly expressing their pent-up frustration with how they have been treated through the downturn. While employers may have taken the necessary steps to streamline operations to remain viable, it appears many employees may have felt neglected in the process. The result is a disengaged and disgruntled workforce.”
So, one survey says that four out of five employees are extremely satisfied with their current job and don’t plan to leave (APCO), while another indicates that nearly two-thirds of workers are unhappy with their employment and intend to bolt whenever they can (Right Management).
Which is it? Can both of these surveys be right?
Here’s my take: You need to take any and all surveys with a grain of salt. Yes, it really is caveat emptor when it comes to these things, and no matter what the respondents may say, I don’t think anyone, anywhere can really handicap when our turbulent economy might improve, or what America’s workforce will actually do when it does.
Never let it be said that I like to dwell only on bad news. As a longtime member of America’s workforce, I’ve been zinged, zapped and zipped by the Big, Bad Recession just like everyone else. And that’s why I am grateful for whatever positive workforce-related news that I can find.
Here’s what I’m talking about, courtesy of global consulting firm Watson Wyatt Worldwide and its latest survey on the “Effect of the Economic Crisis on HR Programs”: The number of employers planning to reverse salary cuts and freezes and restore matching contributions to 401(k) plans has increased in the past two months, according to a survey that was conducted this month with 175 large, U.S.-based employers.
Key findings include:
• Some 33 percent of employers that froze salaries plan to unfreeze them within the next six months, up from 17 percent two months ago.
• Forty-four percent say they plan to roll back salary cuts in the next six months, compared with 30 percent two months ago.
• Twenty-four percent of employers plan to reverse reductions to 401(k) match contributions in the next six months, versus 5 percent in June.
• Seventy-one percent of respondents have made some changes to their 2010 health care plan because of the economic crisis. The most commonly reported changes include increasing deductibles, co-pays or out-of-pocket maximums (41 percent) and increasing the percentage of premiums paid by the employee (40 percent).
In other words, although salary freezes may start coming off, increases in employee costs for health care benefits this year are probably going to stick around.
“Some employers are seeing the light at the end of tunnel and feeling optimistic about the prospect of improved business results,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt, in a news release about the survey. “However, even as some of the program cuts are rolled back, many employees are facing smaller raises, lower bonuses and higher health care costs.”
That’s a sobering reality to keep in mind. Yes, there are signs that the recession has bottomed out and that things will start getting better, but it is going to be a long, slow climb back. We will all continue to feel the pinch for months—and as I pointed out yesterday, perhaps even many years—to come.
This won’t be surprising to anyone working in this Year of Living Dangerously during the Big, Bad Recession, but Hewitt Associates just released a survey showing just how badly the economic downturn has affected raises and salary increases.
Would you believe that 2009 salary increases were the lowest in 33 years?
• Salary increases hit a record low in 2009 at 1.8 percent for salaried exempt employees, down from 3.7 percent in 2008. This is the first time that base salary increases dropped below 3 percent since Hewitt started tracking the data in 1976.
• Executive employees saw only a 1.4 percent salary increase in 2009, and the 2010 projection is 2.6 percent.
• Nearly half the companies Hewitt surveyed (48 percent) froze salaries in 2009, up from 2 percent (yes, that’s 2 percent) the year before. Only 13 percent of companies anticipate a salary freeze next year, but more than two-thirds of those organizations also had a freeze in 2009.
• Variable pay in 2009 was the highest level on record. Variable pay spending for salaried exempt employees was 12 percent in 2009, up from 10.8 percent in 2008. For 2010, companies are budgeting variable pay bonuses at 11.8 percent.
“Even during past economic downturns, we have not seen such dismal salary increases as we did this year,” said Ken Abosch, the leader of Hewitt’s North American Broad-Based Compensation Consulting business, in a statement that seemed of accurately capture the dismal nature of things. “It truly is unprecedented.”
A long time ago in a workplace far, far away, I had a boss who was as hard-line as they come when it came to the notion of taking a new job with less pay. “I have never, ever taken a job for less money,” she told me on more than one occasion, “and I never will.”
Her point was simple: You should never undersell yourself, no matter what. You never take a job for less money even if it’s temporary, or good for your career in the long term, or perhaps even because it’s something you always wanted to do. You never do it, she reasoned, because you devalue yourself and because your salary arc should always be moving up, not down. That’s how she always did it, she said, and she shook her head in amazement the day I walked in and told her I was leaving to take a better position with a smaller organization—for about 30 percent less pay.
That was the first time I took a new job with a cut in pay, but it wasn’t the last. Don’t get me wrong: I never took less money because I really wanted to. It was always because I thought there was some short-term upside to doing so, or because I really, really needed a job and was willing to take less salary to get it.
Burns adds this: “According to the survey of 500 [Chicago-area] job-seekers, 85 percent expressed a willingness to accept a pay cut of up to one-fifth. Considering that 4.4 million Americans have been unemployed for 27 weeks or more, the firm says, it’s obvious that many are not acting on their professed willingness to work for less.”
Should we be surprised that “only” 85 percent of job seekers are pragmatic enough to recognize that there is a glut of talent on the market during this big, bad recession, and that taking less pay may be what’s needed if you really want a job? I’ve been around long enough to recognize that getting 85 percent of people to agree on anything is virtually impossible, so getting eight out of 10 unemployed workers to admit that they would take less to get back and working is pretty amazing in my book.
The bigger issue, as I pointed out in my latest Last Word column, is this: Many organizations, according to The Wall Street Journal, are ignoring people who are out of work and are still going after “passive” candidates (i.e., people with jobs) when they have a job to fill, “reasoning that these survivors are the top performers.”
And although the Journal’s evidence of this practice was largely anecdotal, it is par for what I read and hear from all too many recruiters. In their minds, finding that great passive candidate is the Holy Grail, regardless of much it might cost, how futile it might be to actually lure a candidate away from a solid job, and despite how many other eminently hirable unemployed candidates might be eligible.
Tom Gimbel, chief executive of the LaSalle Network, told the Tribune that part of the problem in the recruiting market now is that salaries were over-inflated in pre-recession days and that “job seekers must acknowledge the fact that they have been overpaid, and once they do that, they will secure a job that meets these new expectations.”
Sure, some unrealistic people have priced themselves out of the market. But when an overwhelming 85 percent of the unemployed say that they’d take a job for 20 percent less than they made before, then maybe it’s time to stop blaming the out-of-work people for their predicament and focus on the real issue: a shattered economy that looks like it’s going to stay shattered (at least in terms of job growth) for a long time.
Here’s a great example of what I’m talking about, courtesy of the San Jose Mercury-News: “One of the accounting tricks used to close [California’s] $26 billion budget deficit is increasing income tax withholding schedules by 10 percent. That is, whatever is withheld for state income tax from your paycheck today will increase by 10 percent come January; you’ll get back any excess payments when you file your tax return in early 2011.”
A spokesman for California’s state Finance Department notes that this “in no way changes any working Californian’s tax liability or taxes owed” and that workers can “increase their allowances to compensate—so long as they do not underpay overall.” But as the newspaper notes, by doing this the state is trying “to shoehorn an extra $1.7 billion of personal income tax receipts into the current 2009-10 fiscal year. Essentially, the state is looking for an interest-free loan from working Californians.”
No workers or taxpayers got a chance to question or challenge this action, although as the Los Angeles Times points out, “the 24-hour session leading up to final passage of the budget Friday afternoon turned into a slow-moving train wreck … lobbyists for major interest groups were present throughout the night, seeking to influence the process. With hundreds of pages of legislative language passed with little time available for review, few knew what the fine print might contain.”
That’s how California workers got saddled with 10 percent more tax withholdings come January 1, and it shows just how dysfunctional the legislative process is out here in the Golden State. It also shows how now, days after the latest budget “fix” was approved, the impact of the middle-of-the-night budget-making finally becomes clear.
What can workers do about this? Nothing really, except fiddle their W-4 exemptions and tax withholdings to compensate for the extra 10 percent hit they’ll take next year. Of course, most people don’t do this, and the cynical part of this middle-of-the-night sausage-making is that no matter how riled up workers might get, few will actually follow through and take the time to do anything about it.
And, here’s the scary part of all of this: If the state of California can stick workers with a higher tax withholding in order to float the state a tax-free loan, what’s to stop other budget-challenged states from doing the same?
Nothing, of course, and I would be shocked if other states don’t look at this latest “trend” from out here on the Left Coast and decide, no matter how kooky it seems, that it makes a lot of sense for them to help balance their budgets on the backs of workers too.
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