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Perfect Storm Facts, Figures and Resources (May 08, 2006) If we were in the compensation information business, we'd be peddling new products. Right now. Most internal compensation systems are not "quick react" tools designed to make split-second decisions. They are policy development tools whose data are used annually. In a Perfect Storm environment (see Friday's article), there is a fast wage spiral in a specific sector or sectors. It is most noticeable in the Engineering and Technical world. It also exists in the managerial and health-care sectors. The labor market takes on "spot-market" characteristics when this happens. There is a severe impact internally (discontent) coupled with strong pressures on profitability. Navigating this "perfect storm" takes speed and agility. Recruiters who are bound into structured internal processes can produce high quality results. In times like these, however, speed and responsiveness are more important. A significant bugaboo is the data in the compensation system. As long as the economy was "cool", it didn't matter that Engineering enrollments declined by nearly 10%. Today, although enrollments have rebounded, there's a structural deficit in the population of engineers. Think of that as a very strong storm front. The heat in the economy produces a significantly increased demand for engineering talent. The structural shortage makes acquiring new engineers the logical approach. But, the demand for new engineers exceeds the supply. Therefore, new employees are routinely getting offers that exceed the compensation of their nearly vested brethren. Unlike the crew of Gilligan's boat (who survived a strong storm), the team depicted in the Perfect Storm perished. This also happens to companies trying to deal with surprise (actually, predictable) fluctuations in the labor market. 25% wage increases to the entire engineering department is enough to destroy a year's profitability (not to mention the morale of non-engineers). Here are some facts, figures and resources to further your thinking:
Talk to the people who supply your company with salary data. Make sure it is timely and updated. Accurate information is the first step to surviving the coming Tsunami. John Sumser . - . Permalink . - . Today's Bugler As job boards multiply, so does the room for error. How will you determine the right sites for your jobs? Our free Webcast has the answers.
What: Free Webcast (earn 1.5 SHRM credits) Who: SmartPost and Bernard Hodes Group When: Thursday, May 11 / 12:00 PM - 1:30 PM ET Where: Register Online Visit smartpost.com
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