Less Money or Fewer Jobs – Which Do You Prefer?

The issue of how best to cut costs and balance budgets has been behind many headlines since the onset of the recession. And it’s coming to a head in New York State right now, with a bitter fight over whether furloughs and pay cuts are a better alternative than layoffs.

A recent New York Times story, entitled Mayor to Cancel Teachers’ Raises, Averting Layoffs, details Bloomberg’s decision to withhold across-the-board pay increases for public school teachers and principals for the next two years to “save the jobs of some 4,400 teachers.”  It seemed like a reasonable decision, but not everyone thought so.

According to the New York Times article, the following was attributed to Michael Mulgrew, the president of the City’s teachers union: “He does not have the power to unilaterally decide on the teachers’ contract, and we have reached no agreement on his proposal to freeze teacher pay.”

Go back further and read a Wall Street Journal article on Governor David Patterson’s decision to furlough 100,000 state employees for one week, saving the state $30 million.  The measure was considered a last-resort effort, as the state faltered on getting a budget out on time due to unfruitful negotiations with unions over demands to receive the 4% raise promised to state employees this year.  Again, saving the state money and filling a budget gap by holding off on a raise or working one less day without pay sounds reasonable when thinking about the alternative – no money at all, and no work either.

However, not everyone felt the same way.  In a New York Times piece about the same topic, Kenneth Brynien, the president of the Public Employees Federation was quoted as saying: “This action on the part of the governor is clearly illegal.  We have a contract that says that we work all year and make a certain amount of money.”  The Supreme Court halted these furloughs and the state must figure out another way to fill the gap; possibly by cutting jobs entirely.

Now consider this item from a recent article in the Boston Globe – “Colleagues pitch in to ease the pain.” The article describes Brandeis University English professor William Flesch’s dilemma as he was forced to balance the budget of the school of Arts and Sciences.  Looking to save jobs, he donated 1% of his salary and asked others in the faculty to do the same.  A total of $120,000 was saved.  In the same article, it was stated that at Beth Israel Deaconess Medical Center, executives recently agreed to take a salary cut and doctors donated more than $350,000 to preserve several hundred positions.

To me, this seems like the way to approach an economic crisis that is still plaguing our cities and states, despite signs of growth in recent weeks.  Those with the means to survive should do their part to help hardworking people keep their jobs.

But should other alternatives be used to keep people working?  Furloughs and pay cut/freezes seem like an easy answer; people can make ends meet with less money–more so than they could with no money or unemployment.  When offered, furloughs and pay cuts for all make more sense than mass firing, especially when you don’t know if you might be the one being fired.  But maybe it’s not as simple as that.  Tell us your thoughts.

Vault’s 2010 Consulting Survey: The Numbers Are In

Well, folks, the 2010 Vault Consulting Survey has officially come to a close. After racking in close to 10,000 responses from consultants around the world, we are left with a rich pool of data, from which we can draw an interesting portrait of the consulting industry today.

While we won’t be releasing the consulting rankings until the end of the summer, below you’ll find some stats from our North American survey that will give you an idea of who participated and their general impressions of their respective firms.

Percentage of respondents who are men: 69

Percentage of respondents who are single: 57

Percentage of respondents who are non-White: 22

Percentage who said culture was the single most important factor that made them decide to accept their firm’s offer over others’: 44

Percentage who said prestige was the single most important factor that made them decide to accept their firm’s offer over others’: 14

Percentage who said that, knowing what they know now, they would make the same decision about which firm to join: 92

Percentage of respondents who worked as a summer intern at their firm: 18

Percentage of consultants who received a 2009 year-end bonus: 83

Average score on a scale of 1 to 10 (where 1 is “inadequate” and 10 is “extremely generous”) that respondents give to their compensation: 7.43

Percentage of respondents who work 2-3 weekends per month: 24

Percentage of respondents who work over 70 hours per week: 7

Average score on a scale of 1 to 10 (where 1 is “completely unsatisfied” and 10 is “entirely fulfilled”) that respondents give to their overall satisfaction: 8.07

Average score on a scale of 1 to 10 (where 1 is “in a precarious position” and 10 is “well positioned to thrive”) that respondents give to their firm’s overall business outlook: 8.66

–Posted by Naomi Newman, Consult THIS

Chart: Finance Industry Salaries vs the Private Sector

A little more perspective on the financial reform issue. And a question: is it more surprising that the average salary for people in finance is around double that of people in the private sector as a whole, or that private sector salaries have only doubled in the last 60 years, while those in the finance sector did the same in just the last 20 years?

The chart appears here, and I came to it via The Huffington Post.

The Art of Salary Negotiation: Answers to Reader Questions

From the recent Vault.com and SixFigureStart Ask Anything teleclass, here are some questions on salary:

Lisa asks: What’s the best way to approach a recruiter about salary negotiation…I’d like to know a) how someone new to the workforce should approach negotiation, and b) how that changes when you’ve got a few years of experience.

Recruiters will demand to know salary before they present you to the client. They need to know that you are in the ballpark of what their client is expecting. It also is good market knowledge for them to have. So you need to know that whatever you say goes to their client.

When you are new, you might think you have no negotiating leverage. It is true that the big management training programs or analyst/ associate programs at banks and consulting firms have set salaries with little negotiating. But for everywhere else, and that means most other jobs, there is no standard salary. You are paid what the employer has in their budget and what they think you are worth. So look at the market value of your skills (computer, languages, analytical, coursework), your internships and part-time jobs, and your degrees. Know what benefit you will bring to your employers bottom line and what comparable people doing these same roles are making. When you are new, employers will try to pay you based on your years of full-time experience because you have relatively little. You want them to focus on skills and results.

When you are experienced, it’s trickier because there are more variables but the essential lessons remain the same. Know your market and how you contribute. That is your value and that should be your price.

Bhavani asks: Due to the recession, I committed to a job offer which payed very less(peanuts) but was offered a good job profile. As time progressed I realized that the company did not deliver on its promises and I plan to quit soon. As I apply for jobs, I am expected to quote a salary based on my current salary. The current salary is very little and I believe that with my experience and education I should be able to quote a higher salary. How can one deal with this situation?

Your current salary is a very strong anchor to what employers think they need to pay you. So you need to do whatever you can to establish your value before divulging how little you make. Focus on what you are bringing to the job and what comparable people in these roles are making. See the points above. Now that you have established that this is the correct anchor you can explain your salary as an anomaly and one of the reasons you are leaving. Employers are happy to get good hires at a fair price even if that means paying a lot more than what you happened to make before.

Gordon asks: How do I respond when a job posting (application) asks for salary history and minimum salary requirement?

This is why I don’t recommend that people spend a lot of time responding to job postings. There is very little room to maneuver as some employers will toss out applications with missing information, such as salary and salary requirements. I won’t even move ahead with presenting candidates to my clients/ hiring managers without salary info. So you have to respond with the truth, and boom, the salary you name anchors how the employer perceives you.

If you don’t want to respond (such as Bhavani might not give his question above) you need to find another way to apply that circumvents the application. Network into the decision-makers and bypass the recruiter. Make a pitch that focuses on your value so that salary is a secondary consideration.

–Posted by Caroline Ceniza-Levine, SixFigureStart

Prestige or Work Life Culture? What’s more important in choosing a work place?

We’re now in the midst of survey season (the consulting survey went out last week), and it’s always interesting to see what drives people to choose their firm over others. These factors certainly change over time; a couple years ago, one might have chosen one firm over another based on compensation, but now that the playing field has been somewhat leveled in that area, it doesn’t play as big of a role in employment decisions. Something else to take into account is that the job market contracted over the past year, so individuals had less options than they did in the past, often leading them to accept the first offer they receive.

One factor that certainly plays a dominant role in career decisions is overall prestige. And by prestige, I’m referring to a firm’s reputation in the industry, as measured by the perception of employees outside of that particular firm. Historically, we’ve put a lot of weight on the prestige metric, presenting our ranking of the top-50 consulting firms, which gauges just that: a firm’s reputation in the eye of outside consultants.

There’s no doubt that a company’s reputation in the industry is critical to attracting top talent. According to a recent Kelly Services survey, 83% of job seekers rated reputation as being an important factor in company selection. John Callagher, general manager at Kelly Services, told Recruiter magazine that regardless of unemployment levels in the economy, a firm needs to protect its reputation. “A company’s ethical reputation has become an increasingly important part of the employer branding, as today’s more savvy candidates look beyond the company’s products and services. Although the recession has led to a high level of unemployment, quality candidates are still hard to find and they will be attracted both by the ’feel good’ factor associated with an organization and also by the pride derived via association with that company.”

But increasingly, consultants are telling us that prestige is only a small part of the story. So far in this year’s survey (and remember, the survey has only been open for a week, so results will change over the coming weeks), 42% of consultants told us that firm culture is of much greater concern to them in choosing a workplace, compared with just 11% for prestige. See the results for yourself:

What do you feel are the most important factors in choosing a workplace? Has prestige become less of a concern in today’s job market?

–Posted by Naomi Newman, Consult THIS