Monthly Archives: May 2011

A Peek At 2012 Compensation Planning.

Update:  As of today both Compensation Force & World At Work are confirming what we projected in May of this year for you 2012 compensation planning.  Read the original article below.

 

This early data is confirmed by study results released recently by Hay Group (310 organizations, surveyed in March through June 2011), which also project that U.S. employees can, for the second year in a row, expect median pay increases of 3.0% in 2012.

Creeping inflation has not translated into higher U.S. salary increases so far this year as cautious employers maintain prudence despite their own gross sales and future orders improving.  It’s hard to blame them.  While some employers are optimistic about prospects in the next year or so, they must remain cautious about hiring and with increases to payroll costs.

Various compensation consultants have said the modest growth in wage increases heading into 2011 are holding. Raises were expected to be 3% in 2011, up from about 2.5% in 2010. Unfortunately gas and grocery inflation have erased increases and employers have not yet adjusted upwardly citing continued global economic concerns. Some comp gurus believe that if commodity prices continue upward they could affect compensation in the second half of the 2011.  So what about comp in 2012?

  • Even though capital investment and hiring will work their way back into the budgeting process, salary increases above the 2011 levels will not.
  • Increases in consumer prices may put more pressure on wage growth but increases in 2012 will remain the 2.8% to 3.0% for most management and employees alike.
  • Health benefit costs will continue upward for both employees and employers, but the percentage of increase absorbed by employees will max out at 70% of premium for family coverage.
  • Employers will eliminate “benefits package re-designs” by switching carriers to control costs. Employees view these redesigns as a “take-away.” No matter how you spin them.  More companies will shift next year’s benefits cost increases directly to employees making for potentially higher base compensation expectations that may not be realized.
  • More employers will institute variable compensation; bonuses, profit sharing and team-based rewards, and move eliminate fixed merit budgets excepting collective bargaining.
  • Discretionary performance-based compensation bonuses will be driven deeper and broader across employee populations.
  • High performer retention through maximized differentiation in salary-increase and discretionary-bonus levels will continue to expand.
  • Across many sectors, employers are eager to retain their best talent and are extending base raises to 6% or 7%, offsetting that with low or no increases for weaker performers.
  • Industries, like pharma, energy, tech, and healthcare, average salary bumps are coming in just above the norm, at 3.0% or 3.1% in 2011.  That will continue in 2012.
  • The AFL-CIO said inflation isn’t playing out in contract talks so far this year, but that may change in 2012 post negotiations with Verizon and for Big 3.  The big issue in 2012 for represented employee benefits costs which are currently at 20% to 25%.
  • Wage freezes, while for the most part are gone, could revisit in 2012 should inflation, restrictive monetary policy, and the rising foreclosure rates continue.
  • Healthcare costs will rise 16% to 17% so even with employee’s share of benefit cost steadied at 70%, real wages will go backwards in 2012.

Most employees should see base increases at or slightly above 2011 levels in 2012 with increase in differentiation between high and low performers.  Profit/gain sharing programs will also rise.  Real wage for most employees will be reduced by increases in healthcare costs and inflation in 2012.

Hi.

I’m Jim Tait, and HR 2012 is where I write about, well… HR Stuff and Things For 2012. One of the coolest things about my job is the unique opportunity to speak with and visit HR professionals and leaders across numerous businesses and industries.  I listen, synthesize, and then project to 2012.  I’m not trying to be Ms. Cleo; just trying to think ahead.

When I’m not agitating here, I’m agitating my wife De Ann, our five kids, or the dog.  

I’m also the lucky founder of OPI National Outplacement.  OPI National Outplacement and Career Transition Services is based in Knoxville, Tennessee, and has served companies and individuals in multiple industries since 1999. Specializing in large, complex, project work OPI has supported groups from 2 to 2,000 throughout the United States, Canada, and Mexico.

Prior to OPI, I did time with Union Carbide, ABB, and AlliedSignal in various Executive Operations and HR roles.  I can be reached at 865-531-9154.

Advertisements

U.A.W. Organizing Efforts In 2012.

You may recall the UAW’s latest strategic initiative to increase membership which kicked off in December of 2010. Organize the transplant auto factory workers of America! The union’s campaign against Honda, Toyota, BMW, Hyundai, VW, etc., was supposed to begin in earnest in January, 2011.

This was to be a $60M campaign that included among other actions an “eleven principle plan” and was to be led Richard Bensinger, the former head of the AFL-CIO’s organizing institute and former lead organizer for the SEIU.  The 11 point plan invites employers to endorse “no coercion, intimidation, equal access, non-disparaging, etc. in the spirit of fair elections. Basically, endorse the principals, have an election, and if we win, great, and if we lose we walk away.  Don’t endorse, and we bring our resources to bear against you in a PR war designed to depict you an abuser of human rights.

So, where’s the rhetoric, hand-billing, and unfair labor practice charges?  Bob King, UAW President did say “If we don’t organize the transplants, I don’t think there is a long-term future for the UAW.”  So what happened?

A lack of receptivity on the part of foreign OEMs & suppliers to agree to the UAW’s “Principals for Fair Elections”, and traditional confrontation in the form of Big 3 negotiations is what happened.  Will King target Ford, and then pattern bargain GM & Chrysler around the new Ford National Master Agreement?  Or since the UAW has a stake (ownership) in GM & Chrysler, bargain against himself first, and then take on Ford? What about the tiered wage systems?  Bottom line is that UAW organizing for 2010 will have to take a back seat to Big 3 Negotiations.

King and the UAW will continue keep the organizing ember lit.  Somewhere between wrapping up the Big 3 negotiations and  PAC activity centered on the 2012 elections, the UAW will ratchet up organizing efforts in the South using these types of strategies and tactics:

  • Redeployment of the eleven principles of the fair election campaign with support from German Unions like IG Metall and others who will attempt to influence key German leaders of VW, BMW, Mercedes, and Tier One German suppliers.  Same for Toyota, Nissan, Hyundai & Kia with respect to Japanese and South Korean unions.
  • Deploy the activists and interns of the new UAW Global Organizing Institute which “is committed to developing the next generation of social justice activists and organizers through education and training, non-violent direct action, and community relationship-building.”
  • Drive social activism through groups, such as the Southern Faith, Labor, and Community Alliance.   A key component of the plan will be to build solidarity between the “student activist” and the “worker” as finding a job and then job security will threaten both.
  • Pushing cross-industry worker solidarity towards “middle-class” solidarity.  Simply put, if you have a boss, you are a middle class worker, and should stand with the UAW.
  • Reengagement with the Labor In The Pulpits program in tandem with the Interfaith Worker Justice & AFL-CIO.
  • Reaching out to the unemployed.  Motivated by sense of inclusion and anger; affiliate memberships will produce volunteers, salt & organize companies once landed, and potentially pay “affiliate dues.”
  • Drive to embrace youth through “anti-institution” messaging.  “You can’t trust any big institution focused on money, and we’re not.  We’re focused on you.”  Social media will play a big role here as it will shape a pliable youth who have had little exposure to the “labor cause.”
  • Champion improved education through anger and fear arising from educational downsizing, and reform of state teachers unions by legislators.
  • Make respect and dignity the issues with transplant workers; not pay.  “A Toyota plant is all about intense competition with fellow workers, not teamwork, fear of reporting injury, surveillance, temps, and a creeping cynicism.

The UAW understands they need to become a part of Southern populism; a part of the culture.  More NASCAR, pulpit work as mentioned above, college and high school football, fish fries and BBQ.  You’ll see targeted Facebook & LinkedIn advertising, and to a certain extent Twitter for relationship building. It will be easy to recruit country music and rap artists who are all about sympathizing with work, family, and struggle.

The UAW knows that they need to become a part of the culture, the community, and it can’t wait until Toyota is organized.  They’ll be back soon.  With a number of states pushing back on public unions, and recent rulings at the NLRB, you’d be wise to think about how the UAW or any other union for that matter will be positioning to approach your companies workers.  Think I’m off base; watch the video.  “Ya’ll come see us, ya’ hear.

Hi.

I’m Jim Tait, and HR 2012 is where I write about, well… HR Stuff and Things For 2012. One of the coolest things about my job is the unique opportunity to speak with and visit HR professionals and leaders across numerous businesses and industries.  I listen, synthesize, and then project to 2012.  I’m not trying to be Ms. Cleo; just trying to think ahead.

When I’m not agitating here, I’m agitating my wife De Ann, our five kids, or the dog.  

I’m also the lucky founder of OPI National Outplacement.  OPI National Outplacement and Career Transition Services is based in Knoxville, Tennessee, and has served companies and individuals in multiple industries since 1999. Specializing in large, complex, project work OPI has supported groups from 2 to 2,000 throughout the United States, Canada, and Mexico.

Prior to OPI, I did time with Union Carbide, ABB, and AlliedSignal in various Executive Operations and HR roles.  I can be reached at 865-531-9154.

Go Generic in 2012.

One of the biggest challenges facing HR in 2012 will be managing health benefits costs. No, really? Easier said than done; right?  Rising costs from federal health care reform legislation combined with a continuation of a globally weak economy may impact organization’s total rewards budget while making employees more sensitive to changes in their benefit costs.

Despite a dismal outlook for plan year 2012, you can expect at least one bright point. Seriously.  A one-off opportunity to significantly decrease your organization’s pharmacy benefit costs.

In 2012, the twenty-year patents for a majority of top-selling prescription drugs will expire, and will become available in generic form.  Employees will have the option to choose generics. Informing employees when generic alternatives are available will have an immediate impact bottom line of both employees and employers.

It’s important to sell this option to employees.  Employees need to know that generic drugs are:

  • Chemically identical to their brand-name counterparts.
  • Held to the same manufacturing and quality standards.
  • Cost a fraction of the brand drug.
  • 68% of prescriptions written are for generics.
  • The remaining 1/3 that is driving up your pharmacy benefit claims.

Your PBM (Medco, Caremark, Express Scripts, Walgreens, CVS/Caremark) has tools available to educate employees about generics.  Partner with them to initiate the following:

  • Have the PBM provide data identifying which claims activity is for expiring-patent drugs, such as Lipitor, Plavix, Actos, Symbicort, and Crestor.
  • Educate employees about mail order programs for maintenance medications. This reduces employee out of pocket expense by 65% or more.
  • Use email and social media to alert employees that frequently-used medications are available as generics.
  • Encourage employees to ask  doctors for generics.
  • Reach employees with hypertension, diabetes, and cardiovascular disease who are likely to use brand prescriptions disease management programs
%d bloggers like this: