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“Top 4″ Total Rewards Predictions for 2010
Last year at this time, I wrote an article forecasting my “top 3″ predictions for HR and total rewards professionals in 2009. With only a few weeks left in the year, now’s a good time to revisit those predictions to see how accurate I was, and look forward to 2010 with my “top 4″ predictions for the New Year (yes, I had to add one more for 2010!).
Managing compensation in a stable economy is challenging enough, yet 2009 tested us as never before. We knew coming into the year that it would be a tough one, stretching us in ways we could and couldn’t anticipate. We found ourselves slashing budgets wherever possible, laying people off from their jobs, reducing expenses multiple times during the course of the year, and holding on to what we could. This scenario became the new norm in 2009.
My “top 3″ HR/Total Rewards predictions for 2009 were (comments italicized):
1). Employers would continue aggressive downsizing, yet hire for specialized skills. True, yet even I did not foresee the depth of the layoffs to come in sheer numbers of people who lost their jobs. Specialized skills and expertise are always in demand, and this trend will continue into 2010.
2). The number and complexity of employee relations issues would dramatically increase based upon the growing layoffs, absorbed workloads by remaining employees, and morale issues. Absolutely, this prediction came true! We continue to be inundated with study after study that tells us how unhappy the majority of workers are in their current jobs, yet feel they have nowhere to go.
3). 2009 would truly test HR and compensation professionals, causing many to leave the profession. How many of your former colleagues lost their jobs this year? Enough said….
Moving onto 2010’s “top 4″ HR/Total Rewards predictions, they’re listed in no particular order:
1). The unemployment rate will bottom out in the first quarter of 2010, relieving pent-up demand from high performing, skilled employees and creating movement in the job market for the first time since 2008. Employers will only add staff once they must, with the pain of recent layoffs still fresh in their minds. Once overtime has been maxed out and employers cannot add more temporary staff, they’ll begin to hire workers. Employers must identify their highest tier of performers, develop and deploy retention programs to mitigate loss of talent (hopefully, these plans are already in place….).
2). With increased scrutiny from the Federal government on managing risk versus reward in executive pay plan design, compensation professionals will need to play an integral role in auditing and assessing all of their in-house compensation programs. This review includes Board sub-committee structure, authority, oversight & review for compliance with new guidelines. These new regulatory standards from the Fed and SEC are expected to expand and apply to all prudently managed organizations (i.e., not only TARP recipients) within the U.S.
3). Variable pay plans will reward employees and recognition programs will help to retain them in 2010. The economy will be improved by November, 2010 because of the elections scheduled then. The question is how much of an improvement will happen between now and then? The key will be to track movement in specific job groups to respond to market pressures to compete from a total compensation perspective. With base pay used primarily as an inflation hedge, variable pay will increasingly become a commonly used tool to identify and retain A,B & C levels of performers.
4). We’re not going back to where we were. Regardless of the direct impact of our own personal experience, whether it’s been a loss of job, reduced 401k balance, lost home, or slashing employee expenses in total compensation programs at work, each of us has a new reality check with reduced expectations emerging on the backside of 2009. We’ve all struggled in some way this year, whether it affected us personally or through some member of our family. And because of that struggle, I think that many have a new found appreciation for the things that really matter in life such as our health, job stability, financial soundness, family, freedom, country and faith.
Because we don’t take things for granted as much as we did only two short years ago, we have a new appreciation for the things that are good in our lives; we’re simply not as greedy as we were. The bubble burst, and we’re smarter for having lived through it. This is one prediction that I hope doesn’t lapse before the end of 2010, because it’s the silver lining of having lived through the recession.
What’s your top prediction for 2010? Add your comment to this article on my blog at www.ReganHR.com/blog.
Copyright 2009, Regan HR, Inc.
