The Recession's Impact on Pay

With workforce compensation being the single largest expenditure for most employers, it’s not surprising that the CTHRA’s 2009 Compensation Surveys conducted by The Croner Company found that industry employers have tightened their belts. However, it’s reassuring to know that fewer than a quarter of the companies issued pay freezes for the year, and variances in compensation from 2008 to 2009 remained in the single digits for all indicators except long term incentives.

 

When it came to base pay, most industry employers budgeted salary adjustments more conservatively in 2009 than in previous years (see Diagram 1). CTHRA’s analysis determined that 2009 salary adjustment budgets were reduced approximately one percent from the prior year, with MSOs budgeting 3.3 percent and programmers budgeting 3 percent. Hay Group’s Reward in a Downturn report provides a comparison for our industry to compare itself to others. In March 2009, the global marketing consulting firm surveyed a cross-section of 2,000 organizations across the globe and found that the average budgeted salary increase across industries was 2.8 percent. Thus, industry employees are fairing a bit better than the general population.

Another positive note is the fact that pay freezes were less prevalent in the cable and satellite industry than others. In Hay Group’s report, 36 percent of the organizations surveyed indicated they had implemented salary freezes. In comparison, only 18 percent of CTHRA’s MSO survey participants and 24 percent of the programmer participants issued budget freezes for salary adjustments this year. Of those, only five (all of whom were programmers/broadcasters) implemented a full freeze.

 

When it came to bonus awards based on performance during January-December 2008, employees working for programmers and broadcast networks were hit harder than their MSO counterparts. Programmers experienced a 7.8 percent drop in bonus awards over last year, double the 3.7 percent decline experienced by employees of the MSOs.

In addition to managing the dollars and cents, we’re seeing companies make changes to their long-term investment programs, build infrastructure in universal titling and leveling and universal incentive plans, and implement HRIS systems and data upgrades.

 

When dollars are scarce, the importance of spending them for maximum impact takes on new urgency, and industry employers are working hard to retain talent and maintain employee motivation. Many are taking steps to improve goal-setting and assessment practices and otherwise sharpen the differentiation between below average, average and exceptional performers. In addition, some employers are also focusing more attention on non-financial aspects of the employment relationship such as promoting learning and development opportunities, cultivating a supportive and inviting work environment and improving communication with employees. Creative employers are also addressing employee concerns regarding issues like the environment and healthy lifestyles in ways that simultaneously save money and otherwise strengthen the company.