One of the reasons we stress Workforce Planning is so that our clients do not lay off the wrong people, the people they are going to need to do the jobs that will generate revenues.
A story in today's Washington Post illustrates the problem.
"...Scott Pattison, executive director of the National Association of State Budget Officers, noted that some cuts may be justified. 'You never want to see an individual be removed, but sometimes lost in the discussions is whether some of these positions should be eliminated,' he said.
...For instance, Florida's court system has cut 200 employees in the past 18 months. Judges lack staff members to prepare materials for trials at a time when property crimes and foreclosures are up significantly. The state cut so many hearing officers for traffic infractions that drivers started to realize that there was no one to hear cases and contested more tickets. This meant a big drop in revenue -- leading the state to rehire some of the officers.
(Source: Despite Stimulus Funds, States to Cut More Jobs, Alec MacGillis, Washington Post, May 12, 2009)
Tuesday, May 12, 2009
It's A Good Time To Work For Uncle Sam!
Posted by Declan McCullagh
President Obama's call last year for "shared sacrifice" doesn't extend to federal employees, at least based on the details of his administration's 2010 budget released this week.
At a time when the official unemployment rate is nearing double digits, and 6.35 million people are receiving unemployment benefits, the U.S. government is on a hiring binge.
Executive branch employment — 1.98 million in 2009, excluding the Postal Service and the Defense Department — is set to increase by 15.6 percent for the 2010 fiscal year. Most of that is thanks to the Census Bureau hiring 102,000 temporary workers, but not counting them still yields a net increase of 2 percent in one year.
There's little belt-tightening in evidence in Washington, D.C.: Counting benefits, the average pay per federal worker will leap from $72,800 in 2008 to $75,419 next year.
Meanwhile, according to Forbes' layoff tracker, there have been 558,087 layoffs since November 2008 at large public companies; even local school districts aren't immune. That's just a sliver of the total unemployed, which government data estimate to be 8.6 percent of the workforce, or an alternate method of reckoning that counts discouraged workers puts at 20 percent.
Some of the Feds' hiring increases have been stunning. If you look at the four-year period from 2006 to 2010, the number of Homeland Security employees has grown by 22 percent, the Justice Department has increased by 15 percent, and the Nuclear Regulatory Commission can claim 25 percent more employees. (These figures assume that Congress adopts Mr. Obama's 2010 budget without significant changes.)
A 39-page "dimensions" document accompanying the White House's 1,380-page appendix offers justifications for each new hire. Homeland Security says its new employees will "increase border security." The Agency for International Development wants to improve "the management and stewardship of foreign assistance programs." The Smithsonian Institution wants "additional security guards." And so on.
The final evidence that it's a good time to have a .gov e-mail address? Civilian government employees are set to enjoy a 2 percent raise. Not only are private sector workers are struggling to keep their jobs, but their earnings are stagnating and pay cuts are no longer uncommon.
President Obama's call last year for "shared sacrifice" doesn't extend to federal employees, at least based on the details of his administration's 2010 budget released this week.
At a time when the official unemployment rate is nearing double digits, and 6.35 million people are receiving unemployment benefits, the U.S. government is on a hiring binge.
Executive branch employment — 1.98 million in 2009, excluding the Postal Service and the Defense Department — is set to increase by 15.6 percent for the 2010 fiscal year. Most of that is thanks to the Census Bureau hiring 102,000 temporary workers, but not counting them still yields a net increase of 2 percent in one year.
There's little belt-tightening in evidence in Washington, D.C.: Counting benefits, the average pay per federal worker will leap from $72,800 in 2008 to $75,419 next year.
Meanwhile, according to Forbes' layoff tracker, there have been 558,087 layoffs since November 2008 at large public companies; even local school districts aren't immune. That's just a sliver of the total unemployed, which government data estimate to be 8.6 percent of the workforce, or an alternate method of reckoning that counts discouraged workers puts at 20 percent.
Some of the Feds' hiring increases have been stunning. If you look at the four-year period from 2006 to 2010, the number of Homeland Security employees has grown by 22 percent, the Justice Department has increased by 15 percent, and the Nuclear Regulatory Commission can claim 25 percent more employees. (These figures assume that Congress adopts Mr. Obama's 2010 budget without significant changes.)
A 39-page "dimensions" document accompanying the White House's 1,380-page appendix offers justifications for each new hire. Homeland Security says its new employees will "increase border security." The Agency for International Development wants to improve "the management and stewardship of foreign assistance programs." The Smithsonian Institution wants "additional security guards." And so on.
The final evidence that it's a good time to have a .gov e-mail address? Civilian government employees are set to enjoy a 2 percent raise. Not only are private sector workers are struggling to keep their jobs, but their earnings are stagnating and pay cuts are no longer uncommon.
Monday, May 11, 2009
The Curse of the Class of 2009
(Source: The Wall Street Journal)
The Curse of the Class of 2009
For College Grads Lucky Enough to Get Work This Year, Low Wages are Likely to Haunt Them for a Decade or More
By SARA MURRAY
The bad news for this spring's college graduates is that they're entering the toughest labor market in at least 25 years.
The worse news: Even those who land jobs will likely suffer lower wages for a decade or more compared to those lucky enough to graduate in better times, studies show.
Andrew Friedson graduated last year from the University of Maryland with a degree in government and politics and a stint as student-body president on his résumé. After working on Barack Obama's presidential campaign for a few months, Mr. Friedson hoped to get a position in the new administration. When that didn't pan out he looked for jobs on Capitol Hill. No luck there, either.
So now, instead of learning about policymaking and legislation, he's earning about $1,250 a month as a high-school tutor and a part-time fundraiser for Hillel, a Jewish campus organization. To save money, he's living with his parents.
Low Wages Linger
For those who graduate during a recession, the effects on their earnings last years.
If asked a year ago whether he'd be tutoring now, Mr. Friedson says, "I would have laughed in your face."
Trading down to a lower-skilled job isn't just a hit to Mr. Friedson's ego. It could also hurt his bank account for years to come. Economic research shows that the consequences of graduating in a downturn are long-lasting. They include lower earnings, a slower climb up the occupational ladder and a widening gap between the least- and most-successful grads.
In short, luck matters. The damage can linger up to 15 years, says Lisa Kahn, a Yale School of Management economist. She used the National Longitudinal Survey of Youth, a government data base, to track wages of white men who graduated before, during and after the deep 1980s recession.
Ms. Kahn found that for each percentage-point increase in the unemployment rate, those with the misfortune to graduate during the recession earned 7% to 8% less in their first year out than comparable workers who graduated in better times. The effect persisted over many years, with recession-era grads earning 4% to 5% less by their 12th year out of college, and 2% less by their 18th year out.
For example, a man who graduated in December 1982 when unemployment was at 10.8% made, on average, 23% less his first year out of college and 6.6% less 18 years out than one who graduated in May 1981 when the unemployment rate was 7.5%. For a typical worker, that would mean earning $100,000 less over the 18-year period.
The impact on wages could be just as severe this time around, says Ms. Kahn. That's because of the depth of this recession and the possibility that the unemployment rate may approach the 10.8% level not seen since the early 1980s. The rate hit 8.9% in April, the Labor Department reported Friday.
One reason behind declining wage potential, economists say: The caliber of jobs available in a recession, and their accompanying wages, tend to suffer. High-end firms hire fewer people and drive down salaries because jobs are in such demand.
That means many graduates end up with lower-wage, lower-skill jobs at less-prestigious firms or in firms outside their field of interest. Once the economy picks up and they try for better jobs, these workers have to learn skills they should have been developing immediately out of college. In the meantime, colleagues who graduated in a better economy have already developed these skills and progressed much further.
For Brad Dechter, a 24-year-old who majored in graphic design, this could mean starting at the bottom when and if he gets a job at an advertising agency. He studied at the Art Institute of Colorado partly because the Denver school advertises that 86% of alumni get a job within six months of graduation. So far, no dice.
Two recent college graduates are scraping by in the toughest job market in years. They're stuck between trying to find jobs that advance their careers and landing jobs that pay the bills. Eight months after graduation, Mr. Dechter is making just $500 a month freelancing for bands, designing flyers and album covers. When he runs short of cash, he borrows from his friends. He spends his days on Craigslist searching for job openings instead of learning the marketing and design skills he would have picked up in his first year at an agency.
"I've pretty much given up on trying to find my dream job," says Mr. Dechter.
Christine Pacheco, director of career services at the Art Institute, acknowledges that graduates face a struggle now. "They may need to take two part-time jobs and do some freelance rather than get a full-time job," she says.
College graduates remain better off than those with only high-school diplomas, in good times and bad. The unemployment rate in April among four-year college graduates between 20 and 24 years old was 6.1%; among those the same age with only high-school diplomas, it was 19.6%.
But a college degree isn't an automatic ticket to upward mobility, either. Even before the recession began, graduates were seeing their wages shrink. Between 2002 and 2007, according to government data, the inflation-adjusted hourly wage for men ages 25 to 35 with bachelor's degrees (and no graduate degrees) fell 4.5%. For the typical woman, inflation-adjusted wages fell 4.8%.
This year, employers say they'll hire 22% fewer college graduates than last year, according to the National Association of Colleges and Employers, an organization of career counselors. At the same time, colleges are expected to see the highest number of graduates in a decade. The average starting salary for graduates who do get jobs, meanwhile, dropped to $48,515 this spring, down 2.2% from the same time last year, according to NACE.
Plenty of recent graduates are making far less than the average. Between her business marketing degree and numerous New York City contacts, Nicole Buckley, 21, figured she would find a marketing job after graduating in December from Siena College, a small Catholic liberal arts college near Albany, N.Y. She didn't expect to be working the jobs she has now, five months after graduation: As a full-time receptionist with a part-time gig as a model, promoting Bacardi rum and Grey Goose vodka to patrons at bars. But after doing two interviews a day and applying to more than 50 jobs, she had to do something to pay the bills.
"I don't think anyone went to college and said, 'I want to graduate and make $25,000 a year,' " says Ms. Buckley. She estimates her earnings at a little less than $30,000 between the two jobs.
Sarah Veilleux, 22, one of Ms. Buckley's two roommates in a $1,125-a-month Brooklyn apartment, graduated in May 2008 from the University of New Hampshire with a communications degree. For a few months, she worked selling band merchandise at a music venue. Then she found her ideal job: doing promotions for Sirius Satellite Radio. But they need her only 20 hours a week.
"As soon as I saw the offer for Sirius," she says, "it didn't matter how many hours a week." She spends the other half of her week doing administrative tasks for a staffing company, earning $1,500 a month -- $18,000 a year -- between the two jobs.
Still, Ms. Veilleux probably will be better off than those who take low-wage jobs outside their fields, says Till Marco von Wachter, a Columbia University economist. Mr. von Wachter, with a couple of colleagues, has looked at wage data covering 70% of all Canadians who graduated from college between 1976 and 1995, a span encompassing two recessions. His work indicates that graduates who get jobs in their fields -- even low-paying jobs -- are able to learn the right skills, and thus have an edge when the economy rebounds.
Mr. von Wachter also found that what recession-era graduates studied, and where they went to school, made a big difference in how quickly they caught up to workers who graduated in boom times. People who majored in fields that lead to high-paying jobs, such as chemistry, biology, physics and engineering, tended to catch up to other graduates more quickly, primarily by switching jobs during the economic recovery and landing at better firms. In contrast, says Mr. von Wachter, the wages of humanities majors at less prestigious schools were less likely to catch up to the wages of their peers who graduated in healthier times.
For some graduates, the recession has had an unintended upside: a career path they never thought they wanted.
Diane Hempe, 24, planned to be a teacher. But after graduating from the University of Maryland last year with an elementary education degree, she failed to find a job at a school. So she settled for working at a day-care center, where the $12 an hour she brought in felt like an affront.
In December, Ms. Hempe went in an entirely new direction. She took a job in the customer-service department at a Wells Fargo call center in Frederick, Md. "I definitely know I can move up," she says. "I can be in customer service; I can be in collections; I can be in so many different departments."
And in the meantime she's shifting her long-term goals. Instead of getting a master's degree in education like she once thought she would, Ms. Hempe says eventually she plans to get her master's in business.
Other are opting to ride out the slump doing public service. At AmeriCorps, a nationwide community-service network, applications more than tripled to about 48,500 between November 2008 and March compared to the same time period a year earlier. Teach for America received 35,000 applications this year -- 42% more than last year. About 70% of those were recent college graduates. Among the most common reasons people cited for applying, according to Teach for America, were poor job conditions and President Barack Obama's call to public service.
Another alternative to unemployment or a low-paying job: Stay in school.
Graduate applications for 2007-2008 were up 8% nationwide compared to the year before, according to the most recent numbers from the Council of Graduate Schools. Schools such as Northwestern University and Harvard are already tracking double-digit increases this year.
College grads who went to graduate school instead of the job market during the early '80s recession didn't suffer the same wage losses, says Ms. Kahn, the Yale economist.
That's the approach John Bence is taking. A 2008 graduate of Kenyon College in Ohio, the history major worked with a temp agency and did a six-month stint at an international consulting company. After repeatedly losing out on jobs -- at museums, universities, consulting firms -- to more-qualified candidates with master's degrees, he'll head to New York University to get a master's degree in history, specializing in archival management.
"I wasn't surprised I didn't get those jobs in, like, museums," Mr. Bence says. "But I was surprised that no one was willing to hire me to do anything."
The Curse of the Class of 2009
For College Grads Lucky Enough to Get Work This Year, Low Wages are Likely to Haunt Them for a Decade or More
By SARA MURRAY
The bad news for this spring's college graduates is that they're entering the toughest labor market in at least 25 years.
The worse news: Even those who land jobs will likely suffer lower wages for a decade or more compared to those lucky enough to graduate in better times, studies show.
Andrew Friedson graduated last year from the University of Maryland with a degree in government and politics and a stint as student-body president on his résumé. After working on Barack Obama's presidential campaign for a few months, Mr. Friedson hoped to get a position in the new administration. When that didn't pan out he looked for jobs on Capitol Hill. No luck there, either.
So now, instead of learning about policymaking and legislation, he's earning about $1,250 a month as a high-school tutor and a part-time fundraiser for Hillel, a Jewish campus organization. To save money, he's living with his parents.
Low Wages Linger
For those who graduate during a recession, the effects on their earnings last years.
If asked a year ago whether he'd be tutoring now, Mr. Friedson says, "I would have laughed in your face."
Trading down to a lower-skilled job isn't just a hit to Mr. Friedson's ego. It could also hurt his bank account for years to come. Economic research shows that the consequences of graduating in a downturn are long-lasting. They include lower earnings, a slower climb up the occupational ladder and a widening gap between the least- and most-successful grads.
In short, luck matters. The damage can linger up to 15 years, says Lisa Kahn, a Yale School of Management economist. She used the National Longitudinal Survey of Youth, a government data base, to track wages of white men who graduated before, during and after the deep 1980s recession.
Ms. Kahn found that for each percentage-point increase in the unemployment rate, those with the misfortune to graduate during the recession earned 7% to 8% less in their first year out than comparable workers who graduated in better times. The effect persisted over many years, with recession-era grads earning 4% to 5% less by their 12th year out of college, and 2% less by their 18th year out.
For example, a man who graduated in December 1982 when unemployment was at 10.8% made, on average, 23% less his first year out of college and 6.6% less 18 years out than one who graduated in May 1981 when the unemployment rate was 7.5%. For a typical worker, that would mean earning $100,000 less over the 18-year period.
The impact on wages could be just as severe this time around, says Ms. Kahn. That's because of the depth of this recession and the possibility that the unemployment rate may approach the 10.8% level not seen since the early 1980s. The rate hit 8.9% in April, the Labor Department reported Friday.
One reason behind declining wage potential, economists say: The caliber of jobs available in a recession, and their accompanying wages, tend to suffer. High-end firms hire fewer people and drive down salaries because jobs are in such demand.
That means many graduates end up with lower-wage, lower-skill jobs at less-prestigious firms or in firms outside their field of interest. Once the economy picks up and they try for better jobs, these workers have to learn skills they should have been developing immediately out of college. In the meantime, colleagues who graduated in a better economy have already developed these skills and progressed much further.
For Brad Dechter, a 24-year-old who majored in graphic design, this could mean starting at the bottom when and if he gets a job at an advertising agency. He studied at the Art Institute of Colorado partly because the Denver school advertises that 86% of alumni get a job within six months of graduation. So far, no dice.
Two recent college graduates are scraping by in the toughest job market in years. They're stuck between trying to find jobs that advance their careers and landing jobs that pay the bills. Eight months after graduation, Mr. Dechter is making just $500 a month freelancing for bands, designing flyers and album covers. When he runs short of cash, he borrows from his friends. He spends his days on Craigslist searching for job openings instead of learning the marketing and design skills he would have picked up in his first year at an agency.
"I've pretty much given up on trying to find my dream job," says Mr. Dechter.
Christine Pacheco, director of career services at the Art Institute, acknowledges that graduates face a struggle now. "They may need to take two part-time jobs and do some freelance rather than get a full-time job," she says.
College graduates remain better off than those with only high-school diplomas, in good times and bad. The unemployment rate in April among four-year college graduates between 20 and 24 years old was 6.1%; among those the same age with only high-school diplomas, it was 19.6%.
But a college degree isn't an automatic ticket to upward mobility, either. Even before the recession began, graduates were seeing their wages shrink. Between 2002 and 2007, according to government data, the inflation-adjusted hourly wage for men ages 25 to 35 with bachelor's degrees (and no graduate degrees) fell 4.5%. For the typical woman, inflation-adjusted wages fell 4.8%.
This year, employers say they'll hire 22% fewer college graduates than last year, according to the National Association of Colleges and Employers, an organization of career counselors. At the same time, colleges are expected to see the highest number of graduates in a decade. The average starting salary for graduates who do get jobs, meanwhile, dropped to $48,515 this spring, down 2.2% from the same time last year, according to NACE.
Plenty of recent graduates are making far less than the average. Between her business marketing degree and numerous New York City contacts, Nicole Buckley, 21, figured she would find a marketing job after graduating in December from Siena College, a small Catholic liberal arts college near Albany, N.Y. She didn't expect to be working the jobs she has now, five months after graduation: As a full-time receptionist with a part-time gig as a model, promoting Bacardi rum and Grey Goose vodka to patrons at bars. But after doing two interviews a day and applying to more than 50 jobs, she had to do something to pay the bills.
"I don't think anyone went to college and said, 'I want to graduate and make $25,000 a year,' " says Ms. Buckley. She estimates her earnings at a little less than $30,000 between the two jobs.
Sarah Veilleux, 22, one of Ms. Buckley's two roommates in a $1,125-a-month Brooklyn apartment, graduated in May 2008 from the University of New Hampshire with a communications degree. For a few months, she worked selling band merchandise at a music venue. Then she found her ideal job: doing promotions for Sirius Satellite Radio. But they need her only 20 hours a week.
"As soon as I saw the offer for Sirius," she says, "it didn't matter how many hours a week." She spends the other half of her week doing administrative tasks for a staffing company, earning $1,500 a month -- $18,000 a year -- between the two jobs.
Still, Ms. Veilleux probably will be better off than those who take low-wage jobs outside their fields, says Till Marco von Wachter, a Columbia University economist. Mr. von Wachter, with a couple of colleagues, has looked at wage data covering 70% of all Canadians who graduated from college between 1976 and 1995, a span encompassing two recessions. His work indicates that graduates who get jobs in their fields -- even low-paying jobs -- are able to learn the right skills, and thus have an edge when the economy rebounds.
Mr. von Wachter also found that what recession-era graduates studied, and where they went to school, made a big difference in how quickly they caught up to workers who graduated in boom times. People who majored in fields that lead to high-paying jobs, such as chemistry, biology, physics and engineering, tended to catch up to other graduates more quickly, primarily by switching jobs during the economic recovery and landing at better firms. In contrast, says Mr. von Wachter, the wages of humanities majors at less prestigious schools were less likely to catch up to the wages of their peers who graduated in healthier times.
For some graduates, the recession has had an unintended upside: a career path they never thought they wanted.
Diane Hempe, 24, planned to be a teacher. But after graduating from the University of Maryland last year with an elementary education degree, she failed to find a job at a school. So she settled for working at a day-care center, where the $12 an hour she brought in felt like an affront.
In December, Ms. Hempe went in an entirely new direction. She took a job in the customer-service department at a Wells Fargo call center in Frederick, Md. "I definitely know I can move up," she says. "I can be in customer service; I can be in collections; I can be in so many different departments."
And in the meantime she's shifting her long-term goals. Instead of getting a master's degree in education like she once thought she would, Ms. Hempe says eventually she plans to get her master's in business.
Other are opting to ride out the slump doing public service. At AmeriCorps, a nationwide community-service network, applications more than tripled to about 48,500 between November 2008 and March compared to the same time period a year earlier. Teach for America received 35,000 applications this year -- 42% more than last year. About 70% of those were recent college graduates. Among the most common reasons people cited for applying, according to Teach for America, were poor job conditions and President Barack Obama's call to public service.
Another alternative to unemployment or a low-paying job: Stay in school.
Graduate applications for 2007-2008 were up 8% nationwide compared to the year before, according to the most recent numbers from the Council of Graduate Schools. Schools such as Northwestern University and Harvard are already tracking double-digit increases this year.
College grads who went to graduate school instead of the job market during the early '80s recession didn't suffer the same wage losses, says Ms. Kahn, the Yale economist.
That's the approach John Bence is taking. A 2008 graduate of Kenyon College in Ohio, the history major worked with a temp agency and did a six-month stint at an international consulting company. After repeatedly losing out on jobs -- at museums, universities, consulting firms -- to more-qualified candidates with master's degrees, he'll head to New York University to get a master's degree in history, specializing in archival management.
"I wasn't surprised I didn't get those jobs in, like, museums," Mr. Bence says. "But I was surprised that no one was willing to hire me to do anything."
Friday, May 8, 2009
Thought provoking quote about "sons."
"Your son is at five your master, at ten your servant, at fifteen your double, and after that, your friend or foe, depending on his bringing up."
--- Rabbi Chasdai ibn-Crescas
--- Rabbi Chasdai ibn-Crescas
Tuesday, May 5, 2009
Citigroup eyes new ways to pay employees
Mon May 4, 2009
*Citi looking at commissions, other measures to keep staff
*New possibilities could be difficult to execute
*US banks losing staff to hedge funds, foreign banks
By Dan Wilchins
NEW YORK, May 4 (Reuters) - Citigroup may put more employees on commission or offer them larger base salaries as it tries to retain key staffers without running afoul of laws limiting executive pay at banks that receive government funds.
Three people familiar with the matter said the bank has examined a series of possible moves, including special stock-based bonuses, or offering employees a percentage of their group's revenue.
Banks across Wall Street are struggling to reward top performers without violating an amendment to the 2009 stimulus package limiting executive pay. That amendment calls for the Treasury Secretary to review compensation of top employees at any major recipient of funds from the government's Troubled Asset Relief Program.
Bonuses are expected to face particular scrutiny after Wall Street firms paid $18.4 billion of bonuses in 2008, a year in which the U.S. financial sector required more than $1 trillion of government support.
Some banks, most notably Goldman Sachs Group Inc, (GS.N: Quote, Profile, Research, Stock Buzz) hope to repay their TARP funds as soon as possible, in part to avoid having to comply with pay limits.
Citigroup, which has received $45 billion of TARP capital and is not believed to have much hope of paying the government back anytime soon, is having discussions with the government about measures that might be appropriate for retaining revenue producing employees.
A number of possibilities are under discussion, and generally are geared toward ensuring that employees are motivated to perform well. The No. 3 U.S. bank will have a better sense of how to proceed once the Treasury Department crafts more specific guidelines on pay, one person said.
Of particular concern is the Phibro business, which has been extraordinarily profitable. If Citigroup cannot find ways to compensate people there, the energy trading business may be spun off, sold, or opened to outside investors, a person familiar with the matter said. News of this possibility was first reported in the Wall Street Journal.
The Wall Street Journal also reported that Citigroup had asked the Treasury Department for permission to pay special bonuses to key employees. One scenario discussed internally would be a one-time bonus paid to employees mainly in stock that would vest over at least three years.
Citigroup spokesman Stephen Cohen said in an emailed statement that the bank has not presented Treasury with any specific plan for staff retention or special cash payouts.
"Citi continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment," Cohen said in the statement.
The alternatives that Citigroup is considering to standard discretionary bonuses still have flaws with them, experts said.
Commissions, for example, only work well for professionals in sales positions, and even then can lead to conflicts over which sales person was responsible for a deal. Giving percentages of revenue could result in outsized paydays if a business outperforms, which could lead to public outcry.
"There's no perfect answer to this issue," said Michael Holland, founder of Holland & Co, which oversees more than $4 billion.
STEMMING THE EXODUS
But banks have every incentive to figure out how to retain their top staff. On Monday, a source said two equity traders and a salesman from Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) moved to hedge fund giant Citadel Investment Group. Foreign banks such as Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) have also been able to hire employees from U.S. competitors.
In fact, banks that are not profitable will likely have trouble from a political standpoint paying employees anything but stock in bonuses, while banks that are profitable will likely look to repay TARP as quickly as possible to eliminate restrictions they face.
"I just don't think all this planning for other ways to pay people will amount to anything," said Paul Sorbera, a recruiter at Alliance Consulting in New York.
But for now, banks are concerned about retaining staff, and ensuring they are properly motivated.
"If we can't pay people competitively, we can't expect them to stay here," said one bank executive.
(Reporting by Dan Wilchins; Editing Bernard Orr)
*Citi looking at commissions, other measures to keep staff
*New possibilities could be difficult to execute
*US banks losing staff to hedge funds, foreign banks
By Dan Wilchins
NEW YORK, May 4 (Reuters) - Citigroup may put more employees on commission or offer them larger base salaries as it tries to retain key staffers without running afoul of laws limiting executive pay at banks that receive government funds.
Three people familiar with the matter said the bank has examined a series of possible moves, including special stock-based bonuses, or offering employees a percentage of their group's revenue.
Banks across Wall Street are struggling to reward top performers without violating an amendment to the 2009 stimulus package limiting executive pay. That amendment calls for the Treasury Secretary to review compensation of top employees at any major recipient of funds from the government's Troubled Asset Relief Program.
Bonuses are expected to face particular scrutiny after Wall Street firms paid $18.4 billion of bonuses in 2008, a year in which the U.S. financial sector required more than $1 trillion of government support.
Some banks, most notably Goldman Sachs Group Inc, (GS.N: Quote, Profile, Research, Stock Buzz) hope to repay their TARP funds as soon as possible, in part to avoid having to comply with pay limits.
Citigroup, which has received $45 billion of TARP capital and is not believed to have much hope of paying the government back anytime soon, is having discussions with the government about measures that might be appropriate for retaining revenue producing employees.
A number of possibilities are under discussion, and generally are geared toward ensuring that employees are motivated to perform well. The No. 3 U.S. bank will have a better sense of how to proceed once the Treasury Department crafts more specific guidelines on pay, one person said.
Of particular concern is the Phibro business, which has been extraordinarily profitable. If Citigroup cannot find ways to compensate people there, the energy trading business may be spun off, sold, or opened to outside investors, a person familiar with the matter said. News of this possibility was first reported in the Wall Street Journal.
The Wall Street Journal also reported that Citigroup had asked the Treasury Department for permission to pay special bonuses to key employees. One scenario discussed internally would be a one-time bonus paid to employees mainly in stock that would vest over at least three years.
Citigroup spokesman Stephen Cohen said in an emailed statement that the bank has not presented Treasury with any specific plan for staff retention or special cash payouts.
"Citi continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment," Cohen said in the statement.
The alternatives that Citigroup is considering to standard discretionary bonuses still have flaws with them, experts said.
Commissions, for example, only work well for professionals in sales positions, and even then can lead to conflicts over which sales person was responsible for a deal. Giving percentages of revenue could result in outsized paydays if a business outperforms, which could lead to public outcry.
"There's no perfect answer to this issue," said Michael Holland, founder of Holland & Co, which oversees more than $4 billion.
STEMMING THE EXODUS
But banks have every incentive to figure out how to retain their top staff. On Monday, a source said two equity traders and a salesman from Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) moved to hedge fund giant Citadel Investment Group. Foreign banks such as Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) have also been able to hire employees from U.S. competitors.
In fact, banks that are not profitable will likely have trouble from a political standpoint paying employees anything but stock in bonuses, while banks that are profitable will likely look to repay TARP as quickly as possible to eliminate restrictions they face.
"I just don't think all this planning for other ways to pay people will amount to anything," said Paul Sorbera, a recruiter at Alliance Consulting in New York.
But for now, banks are concerned about retaining staff, and ensuring they are properly motivated.
"If we can't pay people competitively, we can't expect them to stay here," said one bank executive.
(Reporting by Dan Wilchins; Editing Bernard Orr)
Friday, April 3, 2009
Small businesses still interested in hiring, survey says
Friday, April 3, 2009
Small businesses still interested in hiring, survey says
Atlanta Business Chronicle
Small businesses are still planning to put out the help-wanted signs, just not as frequently and with fewer spots to fill, according to a survey by TriNet Group Inc.
The TriNet HR Trends Survey found that 55 percent of small businesses intend to hire someone during the year, down from 80 percent in the survey conducted in November and December of last year.
Two-thirds, or 65 percent, of respondents who were looking to fill jobs said the current talent pool was better than normal.
If faced with reducing personnel costs, 31 percent of respondents said they would reorganize staffing, such as making sure they have the right people in the right places. Twenty-five percent would choose to lay off rather than reduce salaries and benefits, and 20 percent of those surveyed said they would reduce salaries and benefits for all or some employees to avoid layoffs.
The San Leandro, Calif. human resources outsourcing company surveyed more than 300 small businesses in the technology, financial services and professional services sectors for its quarterly report.
Small businesses still interested in hiring, survey says
Atlanta Business Chronicle
Small businesses are still planning to put out the help-wanted signs, just not as frequently and with fewer spots to fill, according to a survey by TriNet Group Inc.
The TriNet HR Trends Survey found that 55 percent of small businesses intend to hire someone during the year, down from 80 percent in the survey conducted in November and December of last year.
Two-thirds, or 65 percent, of respondents who were looking to fill jobs said the current talent pool was better than normal.
If faced with reducing personnel costs, 31 percent of respondents said they would reorganize staffing, such as making sure they have the right people in the right places. Twenty-five percent would choose to lay off rather than reduce salaries and benefits, and 20 percent of those surveyed said they would reduce salaries and benefits for all or some employees to avoid layoffs.
The San Leandro, Calif. human resources outsourcing company surveyed more than 300 small businesses in the technology, financial services and professional services sectors for its quarterly report.
Tuesday, March 3, 2009
More Houston CFOs plan to hire than fire
(Source: Houston Business Journal, March 3, 2009)
For accounting and finance staff in the Houston area, jobs may not be too hard to find in the next few months, according to a new study.
According to the Robert Half Financial Hiring Index a net 4 percent of CFOs in the area expect to add staff in the second quarter.
The survey found that 11 percent of CFOs surveyed plan to add staff during the quarter, compared with 7 percent who plan to cut staff.
While the net 4 percent represents a 1 percent drop compared with the first-quarter 2009 forecast for the area, it’s still 6 percent above the national average, according to the study, which was based on interviews with 200 CFOs from companies in the Houston area with 20 or more employees.
For accounting and finance staff in the Houston area, jobs may not be too hard to find in the next few months, according to a new study.
According to the Robert Half Financial Hiring Index a net 4 percent of CFOs in the area expect to add staff in the second quarter.
The survey found that 11 percent of CFOs surveyed plan to add staff during the quarter, compared with 7 percent who plan to cut staff.
While the net 4 percent represents a 1 percent drop compared with the first-quarter 2009 forecast for the area, it’s still 6 percent above the national average, according to the study, which was based on interviews with 200 CFOs from companies in the Houston area with 20 or more employees.
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