You might have noticed that occasionally I step away from benefits to look at compensation instead. I rather like these opportunities. After the complexity of pensions regulation and global healthcare differences, base pay is, well, pretty basic. Or at least it was.
Only a couple of months ago, we agreed pay increases by country, which should be executed about now. However, with our financial results in turmoil, any increases have been put on indefinite hold. Now, the higher beings want to take it further and implement pay cuts. The reason they give is that everyone else in our sector is doing it. But are they?
Big Bad Boss suggests we get some hard data. He wants me to reach out to Smarmy Consulting, our reward consultants. Once, this might have been an excuse for a little lunch date with our account manager Oily Oliver, but sadly I have to arrange a conference call with him instead.
Possibility of pay cuts
Oliver is rather vague about who has and who has not made pay cuts. This is not that unusual; trying to get a consultant to come out with some hard data is like trying to get my colleague to do some actual work. They are both dogged in their resistance. I explain I am not looking for a freebie. If he can give me some concrete written advice for or against pay cuts, I have a tiny budget for that. He hesitates.
I do feel for him, all the organisation’s proper surveys are now redundant and most of its projects are probably cancelled due to the general financial mayhem. Oliver has invited a colleague on this call, a new guy Colin who contributes absolutely nothing. It annoys me because I have no doubt Colin’s chargeable time will end up on our bill one way or another. Desperate times.
While I wait for something back from Smarmy, I reach out to my own network. I have made friends with a few reward managers in our industry and this is the time to call in a few favours. Unfortunately, they are in the same position as me. Senior management are calling for cuts and redundancies, while reward teams are trying to make sure those actions are considered and appropriate. We are all wondering what to do for the best.
Eventually, Smarmy comes back with a handsomely priced 10-page report on the state of the nation in terms of reward. Ten pages are mostly waffle about unprecedented times and great uncertainty in the market. I read it blah blah blah in my head. One thing stands out for me, the actions taken will depend on just how much the financial results of the organisation are affected. Some organisations can ride out a financial dip with no ill effects; others may flounder.
Finally on the penultimate page, some data of sorts: 90% of organisations contacted have cancelled any pay reviews. No surprise there. A huge percentage have redundancies planned. Gulp. A massive proportion have already asked for a voluntary pay cut. Yikes, it looks like we are rather behind the times. Quite a lot of organisations are considering a four-day week. Thinking of myself (just for a moment), of the list of drastic options, a shorter working week would be the most palatable.
Options for reducing costs
I show the report to Big Bad Boss. I point out that pay reductions would have to apply across the board, to our Higher Beings in C-suite as well, or it would look really bad. It might even attract media attention in these times of executive shaming. Big Bad Boss starts fiddling with his glasses as he does when he is worried.
If, however, we move to voluntary four-day week for the next couple of months, it would be the same saving but at least employees would not feel so short-changed. Workload is slow right now, but if there is extra work to be done, most will work late and will do it anyway. Twenty percent of pay for two months is 4% of payroll, which is quite a saving if done across the board. Furthermore, 4% is a very manageable sacrifice for the higher paid; for the lower paid it will be difficult but at least not for too long. Less pay for less time is likely to be much more palatable to staff and management alike than just docking pay and keeping everyone shackled to their laptops. We can spend the extra time taking care of our wellbeing, I say, so there would be a knock-on effect on our claims experience. I try to think of a way to bring up golf without it being too obvious.
Moving to a four-day week
Of course, these things are not my decision. Big Bad Boss takes the report and my recommendations to the next meeting of the Higher Beings. Most of them are already working a four-day week unofficially now the golf courses are open. Big Bad Boss says they huffed quite a bit about not making an exception for the management, but in the end they agreed it would show solidarity with the workforce. Solidarity? Unheard of.
Decision made, there is still a lot to do. I need to work with my HR generalist colleagues to roll out a communications plan. Letters have to be drafted, and reviewed by the legal team. Then they must be sent out, signed, and ticked off as received back. I’m asked to craft a frequently-asked-questions’ document, which cannot actually answer the big questions like ‘will I keep my job’ and ‘will I ever get a pay increase or bonus again’ because we do not really know. All I can do is document any impact of the changes in terms of holidays, sickness and pensions. Luckily, I do not have to talk to any staff myself, but I do have to provide ‘support’ (often just the ability to think) for my dear HR colleagues. You would think they have never done anything like this before.
Next time… Candid considers the panic over pensions.