Last week the Department of Labor announced that the number of long-term unemployed people (those out of work for six months or longer) is growing, while the number of short-term unemployed is shrinking. What the DOL didn’t address is a hot topic that is consistently coming in from readers: When can workers who have had salary cuts or freezes expect to get them restored—Will it be sooner or later?
In October, global consulting firm Watson Wyatt Worldwide Inc. released a survey that seemed to answer this question. In a survey based on responses from 201 U.S.-based companies, Watson Wyatt reported that 54 percent of companies that had made salary cuts or freezes planned to restore them over the next six months. This same survey conducted in August showed 33 percent, and it was just 17 percent when conducted in June. This positive trend is happening largely because more than one-third of the organizations feel their financial setbacks have bottomed out. Additionally, 35 percent of the firms surveyed have plans to restore matching 401K contributions which were previously reduced or suspended.
But don’t start the cheering yet, because one in five companies is still contemplating layoffs through 2009 and 2010, although 93 percent anticipate making job offers in the next three months.
A great many companies are being cautious and are adopting a wait-and-see position because restoring salaries only to slash them again a few months later would destroy an already dwindling employee morale problem and make retaining talent difficult. In fact, the Watson Wyatt survey showed that concern for staff retention is likely to be the primary reason that employees may see fatter paychecks.
The big question from readers is, “Can I ask for my old salary back without jeopardizing my job?” No doubt this conundrum is a result of the signs of an economic recovery (albeit still weak) and the pressures of timing due to holiday gift giving. Workers are anxious to get back to normal, but many employers still seem to be keeping mum about this sensitive issue.
I encourage antsy workers to tread lightly. An industry that is showing improvement doesn’t necessarily mean that your particular company is also on the bounce-back. Do a little homework and check out job boards. Are your competitors posting job openings yet? What is the media reporting about your geographic region and discipline? If there is a glut of talent in your occupational area, salaries will probably stay flat because the availability of someone who can step right into your shoes is greater than when certain skills are hard to find and in higher demand. Moreover, the decision to go back to pre-recession pay will likely be based on three key factors: your industry, your company and how you have personally been performing during this time period.
In the event that your firm is not ready to restore employee pay company-wide, you should plan now for when you next meet with your supervisor to discuss the situation during a performance review. Ask yourself these questions so that you have ammunition to justify a “return to normal,” even if it comes in stages.
• Were you a team player through these difficult times? Did you maintain performance and a positive attitude? This is especially important if you had to assume responsibilities of coworkers who were laid off.
• What is the company grapevine saying? Has the company regained sales? Are there new clients or products in the pipeline? What is the mood in HR or senior management? Be in tune with your organizational culture.
• Be able to demonstrate how you contributed during these tough months. Think in terms of deadlines met, projects completed, problems resolved or feedback from customers.
Finally, be realistic. A pay cut may come back all at once or in percentage increments. Patience certainly isn’t easy as the bills mount, but until you are confident that leaving a job is your only way to regain earning momentum, don’t make a hasty or hot-headed move that could put you on the wrong side of the employment line.
Nancy Schuman is a vice president at Lloyd Staffing, headquartered in Melville, and is the author of eight how-to books on career guidance and job-search techniques. Lloyd Staffing offers temporary, contract and full-time employment services on a regional and national basis. Send your career-related questions to [email protected].