Same Old Job, Now Less Pay
For years, companies have offered raises to their employees. These raises have come throughout different times of the year. Raises are often offered as job incentives. Employees around the country can kiss those raises goodbye this year.
Many companies are tossing annual raises out the window. Millions of employees will be making less this year than they did last year. “Stingy” raises used to be considered any raise 3% or under. It is a completely different story this year. Employees will be lucky if their salary doesn’t go down.
John Dooney, the manager of employment and HR strategy for The Society for Human Resource Management, said, “Companies are looking for ways to keep their business intact without hurting customer service or quality. This is a potential option.”
Five percent of companies nationwide have reduced salaries at some point throughout the past twelve months. However, companies are stopping there. In effort to reduce cost further, companies have also reduced benefits, cut work hours, implemented salary freezes and reduced early retirement options.
Companies are expected to cut salaries anywhere from 10% to 20% during the coming months. Jo Prabhu, CEO of International Services Group said, “Companies have to cut costs. If they don’t do that, they’ll go out of business. Both the employer and the employee have to accept it as a fact of life.”
Many Americans are grateful to take a pay cut and are even more grateful to still have a job. However, taking a pay cut for many others is still hard to accept. Only 17 percent of American workers would be willing to take a pay cut to keep their job. Sixty-nine percent of American workers admit that their number 1 concern is keeping their job.
Bernadette Kenny, chief career officer of Adecco Group North America shares her thoughts, “This kind of approach of attempting to retain employees as opposed to layoffs is a new phenomenon. Organizations appreciate the talent that they have and are doing everything they can to retain the talent.”
What are your feelings towards this new “phenomenon? Do you agree or disagree with these tactics used by so many companies?
