The Academy for Chief Executives, a leading provider of experiential business learning® facilitates groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. Part of membership involves members taking their issues to the table and discussing them with their peers.
At a recent meeting, one of the CEO members raised an issue regarding pay rises in the current economic climate:
“My business has had a great year and I was planning to give staff a 5% pay rise, but now I’m not so sure. What do you suggest?”
This triggered a lively debate during which it emerged that members had dramatically scaled back their pay awards from those suggested in a similar discussion in a previous month. One company that had decided upon a 4% award last month actually pulled in the day before announcement and awarded 0% in conjunction with a redundancy programme. There were similar grim tales from others around the table. The level of pay awards is clearly in dramatic decline at the moment and inflationary expectations are also falling away.
In the end the consensus was to conserve cash in the business and to keep your cost-base competitive. But recognising the issue-holders values of fairness and reward for a good year the suggestion is to give c.2-3% pay rise and either 1 weeks holiday or 1 weeks extra pay as a non-consolidated one-off “thank you” to all staff.
For confidentiality reasons we cannot divulge all of the advice provided by our members – however, we do hold open meetings where guests are able to attend and experience for themselves the real power of ‘The Board You Could Never Afford®’. To find out how you can take advantage of advice like this every month, visit www.chiefexecutive.com.