Evaluating Your Real Compensation Package: Knowing What You're Worth Can Help Secure Your Family's Financial Future. (Career Management)
Nance-Nash, Sheryl, Black Enterprise
ONLY A SHORT TIME AGO, AMERICAN JOB HUNTERS SAT squarely in the driver's seat. Candidates often had the luxury of contemplating multiple top-dollar offers, and perks were plentiful. My, how things have changed.
The sluggish economy has produced layoffs, downsizing, hiring freezes, and salary cuts. While there are exceptions, raises are paltry at best. Some companies are extending the time between annual pay increases to 18 months or more. According to the 2002/2003 U.S. Compensation Planning Survey by Mercer Human Resource Consulting, 17% of employers froze salaries for some or all employees in 2002, and 15% plan no pay increases for some or all employees in 2003.
"During a labor shortage, employers focus on what they have to pay to remain competitive with the market," says Steven E. Gross, U.S. compensation practice leader for Mercer. "With the softening of the economy, companies are looking at what they can afford to pay, not just what they have to pay. That's why we're seeing pay variations by industries," he explains.
To put it bluntly, all these factors have conspired to hit compensation packages hard. But that doesn't mean those seeking employment should settle for jobs that don't respect and challenge their talents and abilities, nor should they shy away from asking for a compensation package they truly deserve. Getting what you want is still doable. But you'll need to be savvier about navigating the job market.
KNOWLEDGE IS POWER
First, do your research and establish what's reasonable in terms of salary and benefits. The answers will vary by industry, company reputation, company size, and geography. For example, for 2003, the expected base pay increase by industry ranges from a low of 3.4% in education to a high of 4.5% in the consulting, legal, and accounting fields, according to the April 2002 Mercer study. In fact, it may be some time before there are significant across-the-board raises. "We could be in for a decade of salary stagnation," warns Brent Longnecker, a compensation consultant and president of Resources Consulting Group in Spring, Texas. "As long as inflation is in check, we may continue to see raises averaging 2% to 3%."
If you want the lowdown on salaries, there is an abundance of information from industry association surveys and polls, trade periodicals, and the Internet, at places such as www.salary.com and www.vault.com. When researching a company, examine its overall health. Assess its financial shape and its ability to pay what you have in mind. Talk to your mentors, and take those phone calls from recruiters. "We have great information," says Virginia A. Clarke, a consultant in the Chicago office of the executive recruiting firm Spencer Stuart. "We can tell you salary ranges. What you don't want to do is ask for a level of compensation your boss isn't getting."
When it comes to benefits, things have pulled back a bit as well. Although the Society for Human Resource Management 2002 Benefits Survey shows employers continue to provide generous healthcare benefits, there have been significant cutbacks in areas such as mental health insurance and retiree healthcare benefits. And while employers had absorbed many of the healthcare cost increases in recent years, that's likely to change. "Employers won't be able to shoulder the entire burden--many have already made adjustments in employee co-pays or will in the near future," says SHRM President and CEO Susan Meisinger.
The 2002 survey also shows a decline in benefits related to education and career development. The number of organizations offering educational assistance fell from 88% in 1998 to 79% in 2002. In addition, firms offering career counseling fell from 32% to 29% over the past year.
Sure, employers are still giving bonuses for individual or team performance--after all, the bonus is still a mighty incentive for hiring and retention. But the percentage of the bonus is smaller says Clarke. …