Suddenly,
bosses have the upper hand again.
As much as
executives bemoan sliding stock prices and slowing corporate profits,
they are happy about one consequence of the economic slowdown.
For the first time in years, they are not at the beck and call
of employees' "gimme more" demands.
In
the 1990s, as the economy boomed and companies went begging for
talent, "the pendulum swung from bosses having all the power to
employees having a lot of it," says executive recruiter Pat Cook
of Cook & Co., Bronxville, NY. "Now the pendulum is swinging back
again."
While
the competition for talent persists, especially for certain highly
skilled technical and creative jobs, bosses don't feel the same
degree of urgency they felt as recently as last year to dole out
big salary raises and bonuses to retain employees, she adds. Nor
do they feel as much pressure to create an employee-friendly work
environment where staff can bring their pets to work, dress casually
every day of the week or receive lunchtime massages at their desks.
Ms.
Cook says some of her corporate clients are no longer offering
employees extra bonus money or frequent raises in hopes of keeping
them from seeking jobs elsewhere. Others are restricting what
they offer even coveted job candidates.
One
client, she says, recently passed on a talented candidate the
company had wooed after he demanded more than the executives wanted
to pay. A year ago, she believes, they would have yielded to his
compensation demands but "now they decided he was too expensive."
Scott Turicchi,
executive vice president at J2 Global Communications, a provider
of messaging and communications services based in Hollywood, Calif.,
says that a year ago, the shortage of engineers and other talent
was so acute that some employees were able to shop around, gather
offers and then demand more money and benefits.
"We never
got to the point of having employees bringing their dogs or leopards
to work," he says, but to keep them happy, J2 Global Communications
offered two rounds of stock options as well as across-the-board
pay raises. It also began paying bonuses quarterly rather than
annually.
"We were
constantly chasing the mythical beast of competition," says Mr.
Turicchi.
Now, J2 Global
Communications finds itself inundated with applications. Although
the company has not laid off any of its 130 employees, it is focused
on reducing costs and becoming profitable.
The company
had been spending about $200 in marketing costs for every customer
it acquired for its $10-a-month messaging product. It is trying
to drive down that cost while boosting sales, and is holding employees
accountable for results.
"Managers
are going to have to deliver against their budgets or explain
the shortfall," says Mr. Turicchi. Bonuses will be rewarded to
those who make outstanding contributions.
"You can't
just get an extra $10,000 because you breathed last year," he
says. "You have to excel and justify why you should get it as
opposed to the person sitting next to you."
Yet for employees
who signed on at J2 Global Communications in the go-go days a
year ago, the new dictum to prove their worth can be hard to adjust
to, Mr. Turicchi acknowledges.
"There's
an uneasiness among employees as they wonder, 'Will I be next?'
" he says, pointing to the layoffs that are occurring at other
companies in the area. "We don't' want them to be terrified, but
we are putting new measures and goals in place."
Laura Hinson,
J2 Global's public-relations manager, had planned to ask for a
salary increase this spring but now has decided to wait. She joined
the company in early 2000 at a salary she later realized was "a
little low," she says. So several months into the job, she asked
for a raise and her bosses came part way, she recalls.
She, in turn,
decided to go back and ask again in early 2001, but is postponing
that request. "We're putting a new budget in place and trying
to make numbers at a certain time," she explains. "Because of
the crunch, I've lost my confidence in asking right now."
For one thing,
she is no longer deluged with e-mails recruiting her for other
jobs. "The shift in the market happened very quickly," she says.
Savvy bosses,
however, caution that slowdowns are not the time to stop rewarding
and advancing valued employees.
"If you don't
treat your employees right, you can't service your customers.,"
says Barbara Bridger, corporate vice president human resources,
at Butler Manufacturing, Kansas City, Mo. The company, which employs
5,000 and makes products for the nonresidential construction market,
is in a very cyclical business "so we feel economic ups and downs,"
she notes.
Yet Butler
Manufacturing, which first launched a profit-sharing program for
employees 90 years ago, says it is spending a lot of money to
train and coach managers and employees.
"You have
to do even more in a slower economy," she says, "so your people
don't become complacent."
