If you’ve watched or read business news in the last six months, you might get the impression that no one has a job anymore. However, this perception is simply not true. Overwhelming numbers of Americans are still employed. Therefore, there is still a great need for companies to implement good compensation strategies to help keep their current workforce focused and engaged.
When the headlines are dominated by bailouts, layoffs and stimulus packages, it’s very easy for employers to take the “you’re lucky you have a job” approach towards employees. And yes, companies can forgo salary increases, cancel bonuses, cut benefits and/or layoff employees and those actions could all be valid for the survival of the business. However, these approaches should be considered as a last resort because they could have long term adverse effects on your most valued employees. Martha Glantz, a senior director at Total Compensation Solutions, has been involved in several significant downsizings for major corporations and she has seen the fallout from these actions. “They might stay through the hard times but you have also given them reasons to be resentful and/or to start looking elsewhere,” says Glantz.
In a time of economic downturns, it is imperative that companies retain their most productive and valuable employees. Because even when the economy is sluggish, organizations still need to continue operations, maintain business relationships, provide good products and services and find new avenues of business. These goals cannot be accomplished unless you have your best people in place.