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    Entries in work (226)

    Thursday
    Feb152018

    The changing mix of employee compensation increases

    TL:DR - More and higher one-time bonuses, fewer and less annual salary/wage increases

    In the aftermath of the recent tax reform legislation passed by the US Congress and signed by the President, you certainly must have noticed a pretty long list of major organizations who reacted to the reduction in the US corporate tax rate by (among other things), awarding bonuses (oddly, almost all exactly in the amount of $1,000) to their employees.

    Here is just a short list of select companies who have shared this windfall with their employees in the form of one-time bonuses:

    Alaska Air, American Airlines, AT&T, Bank of America, Comcast, Disney, Home Depot, Lowe's, Southwest Air, Walmart, Waste Management - and there are lots more.

    The companies above, (and plenty others) have directed the employee rewards portion of their expected tax cut windfall to these one-time bonuses, while a few others (Aflac, Boeing, Cigna, FedEx, Honeywell, UPS, Visa), have either supplemented these one-time bonuses with other employee rewards improvements - increases hourly wages, 401(k) contribution enhancements, and/or stock-based rewards.

    But the vast majority of publicly announced employee rewards increases as a result of the corporate tax cut have been these seemingly ubiquitous one-time $1,000 bonuses. It is almost odd, (and if you are a conspiracy lover, curious), that so many companies in different industries all settled on this same bonus amount. Weird...

    But these tax cut bonuses also draw our attention to a larger trend in employee compensation increases, one that pre-dates the recent surge in one-time tax cut bonuses - the trend of companies allocating more payroll budget towards one-time and variable awards, and relatively less budget to annual (and in theory, recurring), salary/wage increases. Said differently, more and more of the compensation increase that an average worker might see is tied up in discretionary and variable methods, like one-time bonuses. Check out this chart from a piece in the NY Times, reporting on an Aon Hewitt study of the topic:

    Back in 1991, for example, variable pay (like one-time bonuses) took up about 3% of total compensation budgets, while the budget for annual salary increases was 5%.

    Fast forward to 2017 and the amount of budget allocated to one-time bonuses has risen to 12.7% while the amount earmarked for annual salary increases has fallen to 2.9% (the 'getting 3%'ed to death phenomenon).

    A closer look at the data shows that after taking an expected financial crisis/recession dive in 2008/2009, compensation budget allocations have not really recovered to their pre-recession levels, while the budget for one-time bonuses and awards has continued on a slow and steady climb. This makes sense for a few reasons. The harsh economic environment from the recession era is still on many CEO's minds, and the need to be more flexible and adaptable, (especially when it comes to employee compensation), has become standard operating procedure and many companies. E

    Given these recent tax cut bonuses play into that line of thinking - CEOs can't be sure these tax cuts will be permanent, a change in control or philosophy of Congress could alter the landscape at almost any time. Giving one-time bonuses instead of 'permanent' salary/wage increases allows companies to respond to market, competitive, and economic conditions in almost real-time, whereas granting (and potentially removing), salary/wage increases is a much more difficult challenge to manage. Have you ever known any worker who will accept a salary or wage cut cheerfully?

    But beyond that, companies still need to keep worker's desires in mind, after all the labor market remains extremely tight. The Times reports that a second Aon Hewitt survey showed that when asked what they wanted their companies to do with their tax cut windfall 65% of them said they wanted a pay raise, far more than other options like a bonus or an increase to the 401(K) contribution. Interesting stuff for sure.

    Compensation is a tough job for sure. And oddly, it doesn't get that much easier when there are more dollars to spread around.

    Have a great day! 

    Monday
    Feb122018

    Don't talk to me, don't even look at me - I'm busy over here

    Slapping on a pair of headphones or earbuds while you are work, especially in open plan offices, in order to help yourself to focus on your work, and probably more importantly, to send a 'do not bug me right now' signal to your co-workers has been a pretty common element of work for some time now.

    But what do you do when simply putting on headphones is not enough of a barrier between you and pesky co-workers, their questions, their comings and goings, and other kinds of interruptions or distractions? You could simply accede to your true nature and quit your job and take up permanent hermit status? But let's say you don't want to go that extreme, and simply want to find a way to have a little bit more privacy, focus, and send an even more aggressive 'do not bother me' message to the office?

    Enter the 'FocusCap' which has been described as a kind of 'horse blinder for people'. The idea of the Focus Cap is create a 'moble, distraction-proof fortress' so that a worker can 'fully concentrate on high demanding cognitive tasks'. That sounds pretty good to me. I may even need one of those here at HR Happy Hour HQ.

    Check out the videobelow, (email and RSS subscribers will need to click through).

    Pretty wild, right?

    Are office distractions, and the challenges that are presented by the lack of personal space and lack of privacy that modern, open plan offices generate really driving workers to try and build little personal cocoons to carve out some space and peace among the chaos? Maybe so. I have not worked in an open plan setting for quite some time, but I am pretty sure I would not enjoy it all that much. Maybe with a pair of headphones on and a pair of these horse blinders for people I could make it seem like I was in my own spacious (and private) office, or sitting on the sofa in my PJs. 

    And for the record, I have no relationship at all with the makers of the FocusCap. But I do think it is cool.

    Have a great week!

    Thursday
    Feb082018

    CHART OF THE DAY: There are too many open jobs, (or not enough people to fill them)

    A really quick shot for a busy Thursday - from the most recent JOLTS report (that's the Job Openings and Labor Turnover Survey and you should have this page on permanent bookmark), the most recent (as of December 2017) data on the ratio of Unemployed workers to job openings in the US.

    Here's the data...

        

    The actual chart on the BLS site is interactive if you want to play around with it, but I will save you the time and let you know that as of the end of December 2017 the ratio of unemployed workers to open jobs was down to 1.1. Basically, the US economy is closing in on having nearly the same number of unemployed workers, (about 6.3 million ) as there are job openings (about 5.8 million) as of the end of 2017. The ratio of 1.1 has been steady for most of 2017 and ties the all-time low in the this data series' history.

    I have not much else to add to this, beyond what you already know. The labor market continues to be at or near record levels of 'tightness'. It will be really interesting (and fun if you are a data geek like me), to see of the ratio goes below 1 at some point, a situation where even if every open job in the US was suddenly filled by an unemployed person, there still would be open jobs remaining. I guess then we will have to build more robots to fill those jobs.

    Have a great day!

    Wednesday
    Feb072018

    UPDATE: On striking for a 28-hour work week

    A few seeks ago I shared the story of the largest metal and steel worker's union in Germany whose members were threatening to strike for the right (among other things) for the ability to reduce their work week to 28 hours per week for up to two years at a time - mainly in times where a worker has increased child or elder care responsibilities. As a reminder, this is what the steel workers were trying to accomplish:

    Workers have downed tools at more than 80 companies across Germany as the country’s biggest union stepped up its campaign for a 28-hour working week to allow employees to improve their work-life balance.

    In what is shaping up to be the biggest industrial dispute in the metalwork sector in three decades, more than 15,000 employees took part in warning strikes at factories including those of the carmaker Porsche.

    The IG Metall union, which represents around 3.9 million workers, wants every employee in the metal and electrical sector to have the option to reduce their working hours for a total period of two years, with the automatic right to return to full-time employment afterwards.

    In mid-January I offered the take that we shouldn't look at these worker's demands as another example of the 'soft' or laissez-faire approach to work that we in the US like to think is common in Europe, and let ourselves believe that these kinds of increased worker calls for more benefits (including fewer hours potentially), could not become an issue here eventually. Workers in all kinds of industries likely have more power than they are currently exercising.

    Fast forward about three weeks - how did it turn out in Germany?

    UPDATE - German metal workers union secures right to 28-hour work week.

    From the piece in Business Insider:

    A German industrial union has won its workers the right to work just 28 hours per week in a deal that could eventually impact almost 4 million people in the country.

    IG Metall, the biggest trade union in Germany for metal and engineering workers struck the deal which will allow staff to go down from 35 hours to 28 hours per week for as long as two years, in instances where they need to care for children, elderly, or sick relatives.

    The agreement between the union and industry impacts some major, global manufacturers like Porsche, Airbus, and Mercedes, and also includes a 4.3% pay rise for the workers. It is a pretty major win for the workers, who seem to have gotten just about everything they were looking for in the deal.

    Why does this matter, especially to US readers, in a time where unions and labor rights movements in general have been declining for ages?

    I would say to think about this deal, and why the workers were looking for it, as less of a 'union' issue and more of a work/life issue. One of the major benefits of the so-called 'gig' economy is the schedule control that most gig workers have. There is a tremendous amount of flexibility and even power that comes with being able to self-determine how many hours you will or can work in a given day or week or month. Some times you want/need to work more, and other times fewer hours. Especially when dealing with child, elder, or other personal responsibilities.

    This effort by the metal workers union is really an attempt to try and marry some of the best features of the 'regular' employee (steady pay, benefits, some level of security, commitment to one company), with the 'gig' worker economy, (flexibility, work/life balance, control and freedom).

    Gig working is not for everyone. It can be uncertain, scary, can have pretty major fluctuations in compensation and benefits. And 'regular' work also has its downsides - lack of schedule control, long hours, stress about work/life. So what the German metal workers are really trying to do is find a kind of compromise between the two - by crafting a design where they are still 'regular' employees, but have more flexibility to determine when they need to reduce (or increase) their working hours based on personal and family circumstances.

    That is the way to think about this story if you are a business or HR leader in the US or anywhere really - this is not about the union or some kind of Euro-socialist approach to work.

    It is about workers trying to find the 'right' kind of work/life balance and arrangement that fits for them in the modern world. And it is about companies trying to find ways to ensure their goals can also be met, knowing that for most of them, these goals can only be met through the success and well-being of their workforces.

    Have a great day!

    Thursday
    Feb012018

    Steve's 12 Rules For Life

    Apologies if this '12 Rules for Life' meme is a bit worn out (I confess to have only just seen it in the last week or so here and here and since I am pretty much absent on most forms of social media these days I have a feeling these kinds of things come and go and I usually don't catch them), but since it reminded me a bit of blogging say, 10 years ago when these kinds of themes were passed around in blog 'tags' and comments, I thought I would give it a shot.

    So here goes - in no order of importance, relevance, research, or general applicability. 

    And, there are lots of more important rules - like the ones concerning family, relationships, etc. that I have no desire to even try to offer advice, let alone rules. Consider these the most unimportant, but somehow vital 12 rules for life you will ever read. If you read them that is.

    And now here goes...

    1. Pick up the tab - You don't have to do this all the time, just sometimes. There is nothing more awkward than handing a server or bartender seven different credit cards to try and settle a $132 check. Pick up the tab and you just made six friends. And made a deposit in the bank of good karma. You may need that one day.

    2. No talking in a public restroom - with the exception of someone in authority if they need to shout 'The building is on fire, everyone evacuate!'

    3. Do whatever you can to control your schedule. Most of us will end up with some kind of job or career where bosses, colleagues, customers, clients, etc. all have some kind of claim on our time. The more you can limit the number of people who can lock up your time and the amount of time you have to be available to others, the more you will be able to focus on what you truly want to do, and I bet you will be happier overall. Call it your own 'Executive Time' if you have to, and block your own calendar.

    4. Don't stress over the dessert or the third slice of pizza or the french fries or whatever you consider your dietary weakness. No one ever looks back on their life and says 'Gee, I wish I drank more water and ate more salad.' 

    5. Jog/walk/move a little bit more. Sometimes when I travel I have to take two pretty long connecting flights in a row. And sometimes I see the some of the same people get off the first plane, where we had all been sitting for three hours or so, and immediately park themselves down in another seat to wait an hour just to get on another three hour flight where once again, we will all be sitting. It baffles me. And while you are at it, you don't need to find the closest parking space to the grocery store or post office or theater. Park a little farther out and walk for two minutes. It's fun. 

    6. Never place a bet on any animal that can't talk. Betting on ones that can talk is also advised against, but it is fun. Except for tennis. Don't bet on tennis, it is pretty likely the match is fixed.

    7. Don't spend too much time on social networks. I know, that 'rule' is everywhere. But even Zuckerberg has admitted that Facebook (heavy use of Facebook anyway), is not that great for you. Check it like you check your snail mail - a quick scan for a minute as you bring it in from the mailbox and then maybe for 15-20 minutes later as you sort out what is important, what can be trashed and what you need to read. Reading long lists on blogs is, however, very admirable and good for you. So keep doing that. Well done.

    8. Sign up for TSA Pre-check. Even if you only travel a few times a year it is worth every cent. 

    9. Figure out the three things or types of work that you like to do the most, (or which you want to become more proficient), and make sure you reserve time every week to work on these three things. Keep (loose) track of the time you spend on these things and do a kind a self-audit every few months to determine two things. One, are you actually making time to do the things you really want to do? And two, are you getting better at these things? I think the thing that holds us back the most at work and maybe even in life, is that we are not good or comfortable with self-examination and making an honest assessment of things. If that sounds like a bit of a confession/admission you are right.

    10. Set expectations (where you can). In a project or a negotiation or even just 'normal' business, people are generally going to be happy or at least satisfied as long as they are not disappointed or surprised. If you have to, set an email auto-responder during your busy times, (maybe all the time), that lays out when people can expect to hear back from you or the time it will take for you to take some action. If you email me today, (it's a Thursday as I write this), and I auto-respond I will get back to you by Monday COB, then at least you understand not to expect a reply on Friday. This is also a confession/admission of sorts.

    11. It's ok to be a snob about something, (wine, beer, cheese, movies, books, etc.) but not everything. Popular culture is called that because it's you know, popular. Lots and lots of people drink Coors Light, eat at Taco Bell, and go on Dunkin' runs. Jumanji grossed about $340M in 2017. And the people that drink Coors Light and hit the Taco Bell on the way to catch Jumanji? You have to work with them, serve them as customers, and socialize with them. You are not any better than them because you like some triple-hopped craft IPA that was brewed in someone's backyard. 

    12. Don't listen to anyone's rules about how to live. Except for number 8 above. You will never regret not waiting in the 'regular' line at security.

    If you decide to post your '12 Rules' somewhere let me know in the comments, or add a rule or two of your own there. 

    Have a great day!