ERI recently published the results from a survey on the impact of COVID-19 on compensation. It was the first report I have seen that showed some actual pay movement as a result of the ongoing pandemic. More telling were the more than 65% of companies who were either progressing with the plans they made at the beginning of 2020 or had not yet made any decision on what to do.
We have entered the second week of November 2020. If you throw out the two-weeks of holidays for Thanksgiving and Christmas/New Year, we have about 5 weeks to prepare for 2021. Not having a plan, is a great way to lose in the battle for talent and success. You seldom watch movies or read stories about the times people did absolutely nothing and somehow met their goals. This is because it almost never happens.
Change is your competitive advantage when others are paralyzed by indecision. Action is your secret sauce for success when those around you are simply too lazy to do something different. Whether we like it or not, the world is a much different place than it was just a year ago. We will never fully return to those heady, coronavirus-free, yesterdays.
Remote work is here to stay. What that means for your company is probably unique, but change is a must. Pay will change. Work-life balance will adjust. Ignoring this will not make it go away.
Unemployment will remain higher than it has been for several years. This tends to put downward pressure on pay. It may also mean a greater talent pool for some industries. Staying ahead of the market may be easier and allow you to hire materially better talent without spending a fortune.
Now is the time to fix your worst incentive plans, or adjust pay structures that have crumbled under the weight of furloughs, lay-offs, remote work, shrinkage, growth, or any other of the myriad of issues that are being faced in business. Yes, you are tired. But so are your competitors. The best time to win is when they can’t respond. In a world where increases have been in low single digits for a decade, it doesn’t take too much to set your company above the crowd.
Change will happen. The question is whether it will happen TO you, or BECAUSE of you. The former isn’t much fun and the latter puts you in control. As you move into finalizing things for 2021, consider one or two big things that will allow you and your company to set yourselves apart. When everyone else is paralyzed, it won’t take much to do something that makes difference.
Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He has convinced himself he is a “Compensation Futurist” and works as Managing Consultant for FutureSense. Dan is also a leading expert on incentive plans and equity compensation issues. He has written several industry resources including the only resource dedicated to Performance-Based Equity Compensation. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”, “Equity Alternatives” and other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @DanFutureSense.
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