Is there hope for salary recovery after the recession? No one is certain how long the current economic downturn will last, but if that weren’t bad enough, economic experts are starting to ask the hard questions that come afterwards. For example, will the job market return to normal — or will we have to settle for a “new normal”?
It’s beginning to seem a bit like an earthquake: the 30 seconds of shaking that gets your attention, followed by the long-term damage discovered later. The recession has shaken everyone up, and now there’s a lot of scrambling to figure out if workers are going to have to adjust their expectations for a long time to come.
One of the hottest topics is salary, and Glassdoor.com just tackled the issue, saying:
Globalization, increased computing power, and a dramatic shift in consumer spending have organizations radically overhauling the way they get work done. Companies are getting significant increases in productivity while customer demand remains weak. So companies are likely to hire fewer people coming out of this recession, and employment may remain depressed until beyond 2012. This has real-world implications for job seekers and job holders. Some people have advised downgrading job-search expectations and playing it safe with career moves. Others have recommended the exact opposite approach, saying now is the time to reinvent yourself and your career.
Since opinions are so wide-ranging, Glassdoor convened a panel of their own experts. Luckily, the idea they all share is not so much that workers need to expect smaller paychecks or derailed careers in the wake of the recession. What they all do acknowledge is that the landscape will be changed, and more than ever before, workers will have to take a good hard look at what their skills are and where those skills fit into the marketplace.
For some, that could mean staying put. For others, it could mean a whole new line of work. Rusty Rueff had one of the best quotes:
“Now is not the time to ‘run away’ from a job. Many job changes are catalyzed by unhappiness or discontent. Take ten deep breaths before you make that motivated move. That said, there are jobs to ‘run to’ because they are doing what you want to do, where you want to do it, with the people you want to do it with.”
If re-invention is in your future, these experts say the best thing to do is face up to it and move on before you’re moved on. And Hank Stringer had a mantra for the frustrated job searcher: “Companies will hire in an improving market.”Over at Compensation Café, Ann Bares has an interesting reading of the latest research on this topic. She references Buck Consultants’ recent survey,“Recovery, Restoration and Retention: 2010 Compensation Trends.”
That report was interesting—downright shocking, in fact—in that it found 58 percent of employers surveyed plan to award bonuses that are within 5 percent of last year’s amount. The conclusion made by the researchers behind it is that an unexpected number of companies are hitting their targets, and compensation is on the rebound (the survey found salary increases for 2010 average 2.2 percent).
Bares focuses on the 30 percent of employers who say they plan to use market-based salary adjustments to retain their top people. Her takeis that salaries will “catch up” to the recovery, but that unlike past downturns where there was a flurry of activity driving the labor market to and even beyond its previous levels…
…there will be market salary adjustment activity as the economy rebounds, but it will be more focused and selectivethan what we saw in past cycles. Employers will invest salary dollars more cautiously than in the past, and they will continue to draw on other cash and non-cash elements to retain and reward their people. Employers will also, however, respond to the reality of the rebounding value of those employees whose performance and/or skill set makes them critical to retain … and this means (almost inevitably, I think) adjustments to their base pay.
Once again, a bit of a mixed bag for the workforce. Is there a silver lining on the salary front? Probably for some, but we may not get the big-bang kind of recovery we’ve all been hoping for.