As I write this, the Federal Unemployment Benefit of $600 per week as part of the COVID stimulus package expired on 7/31, and with the Democrats and GOP deadlocked related to a new stimulus package, President Trump stepped in with an executive order to serve as a bridge until congress could negotiate a deal in the same area.
This post isn't political. But any and all compensation issues in a pandemic are interesting to me, which is why I had one of my favorite compensation experts - Ann Bares - join me on my BEST BOSS EVER podcast to talk about managing compensation strategy in a pandemic world.
One of the the things that came up (I asked Ann!) was the fact that a lot of companies felt that the $600 per week federal unemployment benefit was preventing capable people from re-entering the workforce. As a leader in a recruiting company, I would tell you that our clients believe this to be true. Ann had a great response, telling me that beyond the reality of whether people with access to federal unemployment were slow to return to work, she's more concerned and focused strategically on the 2nd and 3rd order consequences/impact of any comp program (including expanded unemployment as an example of that).
That was a "mind blown" moment for me, and I ended up wondering aloud whether difficulty finding needed labor may encourage companies to invest and go "all in" in areas like automation at this point. Which ultimately harms employment for the sector of jobs in question.
That's the thing about unintended consequences - you never see them coming.
Check out my podcast with Ann Bares below!
Welcome to Best Boss Ever, the podcast dedicated to helping you develop managers who build great teams. In this episode, Kris Dunn talks about the issues with Managing Compensation Strategy in a Pandemic World with Ann Bares, his favorite industry compensation expert at Altura Consulting Group and writer at Compensation Force.
On to the show (email subscribers, click here if you don't see the podcast player)...
2:00 - Ann talks about her transition from an undergraduate in social work to the world of compensation, where she found an affinity for quantitative methods.
5:30 - Ann and KD discuss what the transition looks like for companies on compensation strategy as we move from a 10-year expansion to the recession we’re already in.
8:00 - Ann talks about unevenness of the pandemic flavor of the recession - some companies are struggling, but some are expanding and thriving.
12:00 - Ann and KD discuss the most likely changes to come for companies that are in pain from a compensation perspective - think prioritized skill set investments for reinvention, etc. Ann and KD also talk about how adjustments are being made to common components like annual increases, etc.
16:00 - Ann and KD talk about when across the board salary cuts might be reinstated in the marketplace.
17:41 - Ann and KD discuss how WFH changes the landscape of competing for talent from a compensation perspective - what's your pay market when a large % of your workforce is remote? Fluidity is a new reality. Kris also focuses on the fact that flexibility for personal wants and needs related to WFH preferences creates a new standard for HR pros.
24:10 - Ann talks about whether companies become less aggressive in benchmarking compensation vs the market in recessions.
27:00 - Kris and Ann talk about whether there Is a brand of company out there that thinks of recessions as a great opportunity to pick up talent. How does their strategy differ from a defensive position on comp?
34:00 - Ann and KD talk about the federal unemployment benefit as part of the stimulus plan, and whether it discourages some people from returning to work. The conversation goes beyond that surface-level topic, as Ann and Kris discuss the 2nd and 3rd order consequences/impact of any comp program. KD notes that any difficulty finding needed labor may encourage companies that are slow to invest in areas like automation to go "all in" at this point.