The Future of Work Archives

The Future of Work – Are Automatic Raises Disappearing in Place of Spot Bonuses?

Published on August 30th, 2016 by Alan L. Sklover

Time to Adapt
When was the last time you heard of someone not getting a yearly raise of one size or another: At least SOMETHING? Well, chances are you may soon start to hear of that from many of your friends and family.

A recent article in The Wall Street Journal highlighted the new-but-growing trend among employers to forego the practice of handing out automatic annual raises to all employees. The article suggests that the trend is here to stay, and will likely continue to grow.

The growing practice is based on four thoughts: First, not everyone deserves a yearly increase in compensation. Second, rewarding employees for actual performance is more effective in encouraging productivity than is rewarding employees for merely staying in their jobs. Third, annual raises to all employees significantly increases overhead for no real discernible reason. Fourth, if “laggards” get a 2% raise, and “superstars” get a 4% raise, the small difference may actually serve to de-motivate to the “superstars.” These four thoughts are subjects of hot debate among compensation consultants.

This trend in employee compensation may also be reflective of the larger economic reality: inflation is so low, and corporate profits are so low, that any increase in overhead in excess of the current 1% or 2% inflation we are experiencing is a negative blow to the bottom line. That will be doubly so if and when we enter into a period of deflation – a shrinking of demand, prices and production – a circumstance many economists see on the horizon.

In place of automatic annual raises, employers are giving out more performance-based “spot” bonuses as rewards for outsize achievements and extraordinary accomplishments. By untying compensation from “entitlements,” and tying compensation to “achievements,” it is espoused that employers will gain greater flexibility to adjust their budgets slower to slower times.

With more compensation becoming “discretionary,” will employers use that discretion wisely, or abuse it? Might the end of automatic pay increases initiate a wave of defections from employers who join the trend? Might outsize bonuses to star performers actually create resentment among the multitude of “non-superstars?” Only time will tell, and the verdict is still out, but two things you can count on: (1) employers will do what they believe is in their interests, and (2) nothing is sacred anymore in the workplace or in workplace compensation.

You must learn to keep your eyes wide open and your ears to the ground. When the times require it, you must also learn to be your own best advocate, because if you do not, no one else will.

But, hey . . . we’re here, and that’s what SkloverWorkingWisdom™ is all about.

© 2016 Alan L. Sklover. All Rights Reserved. Commercial Use Prohibited

Disintermediation – Key Words & Phrases

Published on December 2nd, 2014 by Alan L. Sklover

Key Words

What is the meaning of:

“Disintermediation”?

“Disintermediation” is a long word that you need to know. In simpler words, it means “cutting out the middle man.” It is an ongoing process in almost every business, industry, profession and organization.

Real estate sellers and real estate buyers have used real estate brokers as intermediaries ever since there was a real estate business. These days, more and more, the internet is helping the parties do their business without the assistance – or cost – of brokers.

Likewise in the music industry, record companies (often called “labels”) helped musicians produce and distribute their recordings to their fans. These days, more and more, musicians are reaching out and selling their wares directly to their fans through the internet without intermediaries.

And in employment, intermediaries such as “Help Wanted” ads and executive recruiters are being used less, less and less. The statistics on this trend are quite amazing.

Keep “disintermediation” in mind when you are considering what career path to pursue, what job skills to develop, what employers to work for, and what business you might start.

Even this blog provides information to those who need information that used to require hiring an attorney or career counselor. That is, assuming you could find a knowledgeable and caring one, and then assuming you could afford their services.

If you are an intermediary, beware of “disintermediation.” If you are not an intermediary, don’t become one. And on your job and in your business if you can, “go direct” to your customer, client or consumer. That is where the “action” is.

Disintermediation: profit from it or perish from it.

© 2014 Alan L. Sklover. All Rights Reserved. Commercial Use Strictly Prohibited

The Future of Work – Anyone Want a Raise Every Month?

Published on July 18th, 2014 by Alan L Sklover

raise monthly
What would motivate you more: A raise once every three years, or a raise once every three months? Did I really need to ask you that question? A recent trend finds employers providing more frequent raises for a good number of reasons. Most of all, it seems to work!

Regardless of business, industry or geographic area, all employers need to attract and retain the best-qualified, most productive and dependable employees. And, so, ways to do just that are always under review. Many employers continually experiment with employee-motivation techniques, from “Casual Friday’s” to “Departmental Adventure Outings” to the old-fashioned “Employee of the Month” awards. Smaller companies, especially, need to find ways of holding on to their “keeper” employees.

A recent trend in employee motivation is to provide more frequent raises, promotions or bonuses. The reasons for this are many. First, studies show that quarterly rewards are an unusual, and attractive, recruitment tool. Second, many believe that more frequent “encouragement” boosts employees’ “Three E’s” – Excitement, Engagement and Effort. Third, the practice of more frequent rewards lets poorer performers know how they are perceived and “where they stand” earlier, and thus provides an impetus to the employee either to correct the shortcoming or to leave, before problems fester.

Employees of Shutterfly, Inc. – the popular internet-based image publishing service based in Redwood, California – are eligible for bonuses four times a year and salary raises twice a year.

Those who work for Epsilon, a provider of loyalty marketing services and programs headquartered in Plano, Texas, receive a salary review every six months for their first two years. The program has become a big selling point when interviewing prospective employees in good part because many recent hires can attest to having won all four of their first semi-annual raises, and at least one promotion, in their first two years of employment.

Quarterly raises of 2% to 15% are the norm for employees of Zulily, Inc., a web-based designer and retailer of clothing for moms, babies and kids, headquartered in Seattle, Washington.

The practice of more-frequent employee “rewards” is not yet widespread. A recent study by benefits-consulting firm Aon-Hewitt of 1,147 companies found that only 5% engage in the frequent-rewards practice. But many think that, if it works, it will be seen more and more, as the competition for top-notch talent, attitude and engagement intensifies, which it most surely will.

Show your value, and collect the job security and employee rewards you’ve earned. Makes sense to us. In fact, that is what SkloverWorkingWisdom™ is all about.

© 2014 Alan L. Sklover. All Rights Reserved. Commercial Use Prohibited

The Future of Work – Half of All Asset Management Firms to Disappear? Lessons for Us All?

Published on June 18th, 2014 by Alan L Sklover

Time to Adapt - ClockConsulting firm KPMG, which advises many firms in the asset management industry, has recently released a report on that industry’s long-term prospects, and it isn’t a pretty picture. In KPMG’s view, fully half of the firms in the global asset management industry will no longer exist in 10 to 15 years.

Asset Management’s Future –

Asset managers are those financial firms that are dedicated to managing their clients’ investments. Most often, asset management firms, including hedge funds, employ dedicated portfolio managers and analysts to prepare internal research reports. For many years their clients have been high net worth individuals, pensions, family and sovereign wealth funds, and corporations.

What KPMG is predicting is that younger people, as they age and accumulate wealth, will no longer look to today’s asset managers – including such famous names as Fidelity, Blackrock and Pimco – but will instead choose asset managers based on the asset manager’s online platforms and even social media, with (a) a technology focus and (b) names that are familiar to them.

So, as younger investors grow in numbers and prominence, and increasingly come from the new middle classes in China, India, Nigeria, Mexico and other developing economies, their asset managers of choice may be Apple, Google, Amazon – and even Wal-Mart. Yes, in a few years, municipal bonds and stock options may be located and purchased on Amazon’s master marketplace, or even in Wal-Mart’s Aisle 5.

“We are on the verge of the biggest shake-up the industry has experienced; and the message to asset managers is clear – Adapt to change or your business won’t survive . . . trusted brands that resonate and appeal to a more diverse client base, as well as the younger generation, may be able to build scale quickly,” said Tom Brown, KPMG’s Global Head of Investment Management.

Lessons for Us All –

Change, and an accelerating rate of change, are the only constants we can all reasonably expect. More and more people in my community have no independent family physician, but use the services of the 24-hour “urgent care” storefronts that have employee-physicians on-call 7/24. On an accelerating basis traditional institutions of higher education are offering online courses leading to degrees, and are thus unsure of whether their ivy-covered campuses and football stadiums will become, instead, senior housing and parking lots.

This blogsite, itself, is primarily focused on providing self-help assistance to those with employment issues in their lives, but unable to locate, unwilling to pay for, or poorly served by, the traditional legal profession.

Look to changing demographics. Observe evolving social norms. Get moving on social media. Search out scalability. Simply put, adapt or perish.

As one media mogul was recently quoted, “Either ride the wave or get crushed by it.” At work, in your career, and in your daily life, you are now on formal notice: try to observe, learn and adapt, whenever, wherever and to the greatest extent you possibly can. And as soon as you can, too, because that “wave” is a veritable tsunami, and fast-approaching.

Best “navigation” of work and career issues is what SkloverWorkingWisdom™ is all about.

© 2014 Alan L. Sklover. All Rights Reserved

The Future of Work – The Wired-24-Hour-a-Day Employee: Where will it end?

Published on May 2nd, 2014 by Alan L Sklover

Time to Adapt - ClockIn case you didn’t notice it, employees are now near-expected to be “on call” – or more accurately “on-email” and “on-text” – 24 hours a day. Yet this never-ending work schedule surely disturbs family life, vacations, and even needed sleep and relaxation. Is there no limit? Where-oh-where will it end?

In France, corporate representatives and labor unions have recently joined ranks to agree on a first-ever “obligation to disconnect from remote communications tools” that will give many employees 11 consecutive hours a day of daily “disconnected” time. The accord is expected to be passed into law later this year, to initially cover 250,000 designated workers.

In Germany, starting in 2011 Volkswagen agreed to turn off its Blackberry servers at the end of each workday. In 2013, the German Labor Ministry directed its supervisory staff not to contact employees outside office hours.

In both countries, it has been recognized that, as one corporate officer said, “If you don’t have employees who are in good health, your competitiveness is going to fail.” In neither country has this needed respite been the cause of stock market crashes or any noticeable breakdown in corporate activity.

In your daily work life, consider the value of putting that cell-phone – actually, my Samsung smart phone calls itself my “life companion” – down, turning it off, and placing it in a drawer, and otherwise giving yourself the down-time that every living thing needs.

The never-ending workday will never end, until you make it do so. Step by step, and little by little.

© 2014 Alan L. Sklover. All Rights Reserved


Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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