In tough economic times, one of the hardest things to face as an employer is additional compensation costs. It is difficult enough to manage a business with a positive safety culture and a view of preventing accidents without having to pay additional premiums to the compensation board in the form of surcharges due to poor experience rating.

Women lag behind men in both job level and salary starting from their first position post-business school and do not catch up, according to Catalyst’s Pipeline’s Broken Promise, the latest report examining high potential graduates from top business schools around the world. The study, released in mid-February, reveals that the assertion that women advance in compensation and level at the same pace as men is overstated and, in many cases, completely wrong.

Starting salaries in the accounting and finance, information technology (IT), and administrative fields are expected to remain relatively flat or see modest declines next year, but some positions will buck this trend, according to the 2010 Salary Guides from Robert Half International. Research for the guides provides insight into compensation and hiring trends within each field, and identifies 10 positions where national average salaries are holding strong or seeing slight gains.

"Companies will continue to scrutinize expenditures in the coming year and it is evident that this trend is also affecting starting salaries," says Kathryn Bolt, president of Robert Half International's Canadian operations. "That said, many companies recognize the value in increasing their talent bench to capitalize on emerging opportunities. With a larger pool of top talent available, many organizations are investing in additional full-time personnel who were not previously available."

Here is an overview of compensation trends, segmented by field, along with 10 positions showing steady or increasing compensation, according to the Salary Guides.

2010 Salary Trends: Accounting and Finance
Starting salaries for accounting and finance positions are expected to decrease by an average of 0.4 per cent in 2010. Businesses seek financial professionals who can help manage costs and enhance profitability. Companies also value personnel who possess deep technical expertise, are excellent communicators and collaborate effectively with colleagues across multiple departments.

Positions with the best prospects include:
1. Senior financial analyst: Businesses need professionals who are able to evaluate financial plans, forecasts and budgets, and identify ways to improve profitability. A senior financial analyst at a midsize company ($25 million to $250 million in sales) is anticipated to earn $57,750 to $73,500 in starting salary in 2010.

2. Credit manager/supervisor: Companies need professionals who can contribute to the bottom line by reducing inefficiencies and enhancing profitability. As a result, credit and collections specialists who can evaluate credit risk, manage delinquent payments and help improve cash flow are in demand. Base compensation for credit managers/supervisors working in large companies (over $250 million in sales) is projected to range between $67,000 and $94,250.

3. Senior accountant: Professionals with an accounting designation are sought to handle projects ranging from maintaining the general ledger system to analyzing and preparing financial statements. Individuals who can identify cost-saving opportunities are particularly valuable to their organizations. Senior accountants at large companies are forecast to earn $56,250 to $74,500 in annual base compensation.
4. Accounting clerk: Entry-level job seekers are required to help companies perform basic accounting procedures, including processing accounts receivables to assist in generating cash flow. Many companies who had made deep cuts are looking for individuals to help manage increasing workloads and assist with special projects. Base compensation for accounting clerks is projected to range between $31,750 and $42,500.

2010 Salary Trends: Information Technology
National starting salaries for IT roles are forecast to remain relatively flat with an average decrease of only 0.2 per cent in 2010. Professionals who are most in demand are able to tie IT initiatives to larger business objectives, helping their firms become more efficient and reduce costs. In addition, managers seek candidates with strong communication skills for projects that involve collaborating with peers in other areas of the company.

Positions with the best prospects include:
5. Network engineer: Cloud computing, Voice over Internet Protocol (VoIP) and Software as a Service (SaaS) have significantly increased the complexity of and requirements placed on networks. Further, chief information officers interviewed for the fourth-quarter Robert Half         Technology IT Hiring Index and Skills Report cited networking as the most in-demand skill set. Network engineers can expect to see starting salaries in the range of $70,750 to $93,000 in the coming year.

6. Business systems analyst: As IT and business processes become increasingly aligned, companies are leveraging the abilities of software/systems to improve efficiencies and reduce expenditures. Business systems analysts are in strong demand by companies to help bridge IT with the business and achieve overall objectives. These professionals can expect to see base salaries increase to the range of $73,500 to $97,750.

7. Systems engineer: As companies implement new technologies, technical services roles remain critical to the organization. Systems engineers are in demand to help companies develop and maintain technical infrastructure, hardware and system software components in support of a variety of IT projects. Base compensation for these professionals is projected to range from $62,500 to $82,500.

2010 Salary Trends: Administrative and Office Support
Starting salaries for administrative professionals are projected to decrease by an average of 2.2 per cent in 2010. However, demand is steady for administrative candidates with broad expertise and the ability to multitask, especially within teams that have been stretched thin and have redistributed work among fewer employees. In addition, firms want support staff who are confident as they approach unexpected situations, quick to learn new skills and able to help others adapt to change.

Positions with the best prospects include:
8. Customer service representative: In the current economy, hiring managers consider customer service the function most critical to their organizations' success, according to the 2009 Employment Dynamics and Growth Expectations (EDGE) Report from Robert Half and CareerBuilder. The salary range for a customer service representative is projected to be $28,750 to $37,500.

9. Executive assistant: Companies with leaner teams are looking for employees to take on a wider range of duties. Executive assistants who can wear many hats, support multiple managers and adapt readily to change are in particular demand. Senior executive assistants are likely to see starting salaries in the range of $48,000 to $64,750.

10. Data entry specialist: As companies hire professionals to help manage workflow and assist with special projects, those skilled in high-volume data entry will be in greater demand. Increasingly, these professionals need to work interdepartmentally while juggling multiple priorities. Data entry specialists are forecast to earn between $26,750 and $31,750 in 2010.

Bolt noted that many firms continue to report recruiting challenges despite current labour market conditions. "While many employers themselves have been more selective to avoid costly hiring mistakes, many are faced with competition for high performers and an unwillingness of professionals to leave secure positions. Supplementing full-time employees with skilled temporary professionals allows companies to manage business demands while avoiding over-hiring and the need for possible future layoffs."

The new Robert Half Salary Guides include the 2010 Salary Guide for accounting and finance, produced by Accountemps, Robert Half Finance & Accounting and Robert Half Management Resources; the Robert Half Technology 2010 Salary Guide for technology professionals; and the OfficeTeam 2010 Salary Guide for administrative positions.

The guides are produced annually by Robert Half to offer hiring managers information on prevailing salaries in their geographic areas and insight into the latest employment trends. This year for the first time, the 2010 Salary Guides will be accompanied by online Salary Centres featuring up-to-the-minute information and analysis on the employment environment and Robert Half's new Salary Calculators. The Salary Calculators allow users to quickly access the starting salary range for their specified position and location and can be accessed at www.roberthalf.com/SalaryCentre, www.rht.com/SalaryCentre and www.officeteam.com/SalaryCentre for the accounting and finance, information technology, and administrative fields, respectively.

To learn more about Robert Half International, visit www.rhi.com.

The Superior Court of Ontario has refused to certify a "class action"brought forward by current and former employees of CIBC in which the employees were seeking compensation for unpaid overtime.

Even if you’re not planning critical changes to your staffing, compensation, or benefits to meet tough economic challenges, the media certainly is keeping the anxiety levels high for your employees. They’re aware of bad-news currents in every industry, every day, and they’re worried. Keeping them focused on the job and maintaining good morale during times of crisis is going to make the greatest demands ever on your communications efforts.

In September 2008, PayScale, a provider of on-demand compensation data, conducted a cross-industry survey of 2,043 HR professionals in the U.S. and Canada on their attitudes towards common trends that drive employee compensation and pay practices within their organizations. The organization has now released a white paper on the results.

For most organizations responding to this survey things were not nearly as dire as the news made it appear in 2008. Only 23 per cent of organizations reported downsizing their staffs (on average by 11 per cent), while 45 per cent reported increasing their staff. As expected, the majority of downsizing in the first three quarters of 2008 occurred in the construction, real estate, and mortgage finance industries, while healthcare, IT, and energy sectors grew.

On the flip side, even though 77 per cent of organizations grew or remained the same in the first three quarters of 2008, only 28 per cent reported retention as a top concern, and 47 per cent felt it wasn’t a concern at all. Nor have many small organizations adopted single vendor HRIS or talent management systems designed to improve retention and succession planning of employees. Instead, the majority of organizations employing fewer than 1,000 full time employees continue to rely on ad hoc approaches to managing their HR functions of recruiting, compensation, and retention.

With regard to compensation practices, half of organizations continue to conduct market pricing activities on an ad hoc basis (pay structure below market, individual recruiting, or retention needs). The other half set pay on annual or bi-annual benchmarking schedules. As expected, the larger the organization, the more structured the compensation practices and more frequent the benchmarking process, with formalized compensation practices generally starting at around 100 employees.

Summary of results:

• Organization’s employment growth between 2007 and 2008 was not as bad as economic news might indicate. Only 23 per cent of organizations reported downsizing their workforce between the period, while 45 per cent of organizations reported increasing their size and 32 per cent remained unchanged.

• The average decline rate was 15 per cent of the total workforce. Organizations employing less than 100 full time employees declined by 22 per cent while organizations employing more than 100 full time employees reported declining by just 11 per cent.

• Industries that experienced employment growth were Telecommunications, Pharmaceuticals, Banking, Staffing/Recruiting and Human Resource Consulting, Healthcare and Technology/Computers Software. Industries that declined were Real Estate, Hospitality, Mortgage Financing, Wholesale, Insurance and Construction.
  

• Only 11.6 per cent of organizations reported that their compensation data budgets declined from 2007 to 2008, while 48.5 per cent reported that their budget had increased. Additionally, 48.7 per cent of organizations reported that they expected their 2009 budgets to increase, while only 9.7 per cent believed that their budgets would decrease in 2009.

• While 2007 industry forecasts indicated that employee retention would be the top HR priority of 2008, only 28.2 per cent of organizations reported retention as their top concern. 26.3 per cent of organizations reported that retention was only one of many concerns and almost half of all respondents, 47.5 per cent, indicated that retention was only a minor concern or not at all.Interestingly, organizations were split between whether employee retention would be an issue in 2009, with 52.5 per cent of respondents indicating that they thought it would be, and only 47.5 per cent thinking that it would not.
  

• The top three reasons that HR professionals reported employees leaving a job were personalreasons, 41.4 per cent, poor performance, 41.1 per cent, and seeking advancement  opportunities elsewhere, 34.6 per cent.
  

• Employee retirement does not appear to be affecting many employer’s recruiting or retentionefforts. Only 15.5 per cent of organizations reported that retirement affected their 2008 staffing efforts and only 21 per cent believe that it will be a factor in 2009.
  

• When it comes to structuring compensation, it appears that organizations broadly fall into twobuckets: ad hoc programs to meet objectives and formal structures. 65.8 per cent of organizations use Salary Ranges to structure their pay while 26.5 per cent set pay on a case-by-case basis. Only 7.7 per cent of organizations reported setting pay using broad bands.
  

• Half of all organizations, 49.5 per cent, adjust their pay structures as needed, while 44 per cent of organizations set their pay every year. Only 7.7 per cent of organizations reported adjusting their pay structures every other year. Of the organizations that structured their pay as needed, only 40 per cent reported doing a benchmarking project in 2007. 62.6 per cent of organizations conduct focal point reviews at a specific time each year, while the remaining 37.4 per cent adjusted compensation on the employee’s anniversary.

• Types of bonuses used vary significantly across organizations. 72.1 per cent of organizations offer incentive bonuses, but only 29 per cent of those organizations offer bonuses across the board. 59.8 per cent of organizations reported using spot bonuses, 27.3 per cent hiring bonuses, 17.5 per cent retention and 67.1 target incentives.

For more on the PayScale survey, visit www.payscale.com.

While salary increases are expected to be lower in 2009 than in 2008 for most employees, many high performers have opportunities to boost their overall earnings by more than the average 3.6 per cent increase, according to research conducted by Hewitt Associates, a global human resources consulting and outsourcing company. Organizations are relying on variable compensation – performance-related rewards that must be re-earned each year and do not increase base salary – and, in some locations and for some roles, perquisites to attract, retain, incent and reward key employees.

As the Canadian economy shows signs of a downturn in some sectors and in certain locations, salaries are not expected to increase by as much in the coming year as they did in 2007 and 2008, when raises averaged 3.8 per cent nationally. Even in Alberta, where salary increases still exceed those offered in the rest of the country, increases are expected to get smaller. In 2007, actual salary increases in Alberta were 6 per cent, decreasing to 5.6 per cent in 2008. Projected average salary increases for 2009 in Alberta are 5 per cent.

"Base salaries in Alberta will continue to increase, but not at such high rates," says Jeff Vathje, a senior compensation consultant in Hewitt's Calgary office. "Data from our 2008-2009 'Canada Salary Increase Survey' also indicates that fewer employers see a need to compensate workers in Calgary and Edmonton at a higher rate than those in other parts of the country."

In 2007, 52 per cent of employers paid workers in Calgary more than those doing similar work in other locations. In 2008, that figure dropped to 42 per cent. Edmonton also experienced a 10 per cent drop, with 25 per cent of employers providing extra salary to workers in that city in 2007, and only 15 per cent doing so in 2008. Two Alberta locations have not experienced a decline in employers offering extra pay, however: Fort McMurray held steady at 23 per cent, while 12 per cent of organizations in Grande Prairie did so in 2008, up from 6 per cent in 2007.

Hot jobs/hot locations
The supply of workers with certain skills or training-particularly engineering and information technology – is so low compared with the demand for these employees that 36 per cent of Canadian organizations make special compensation arrangements outside of base salary to attract and retain them. The same holds true for certain locations: 63 per cent of employers go to special lengths to recruit and hang on to workers in specific parts of the country, particularly Alberta.

This additional compensation takes a variety of forms. Sign-on and/or retention bonuses, a living or housing allowance (or housing loan or subsidy) are the most frequently offered monetary arrangements, while non-monetary awards include perquisites such as a cell phone, computer, internet hook-up, car allowance, flexible work arrangements, assistance in locating housing, and additional vacation time.

"Engineers in Fort McMurray are likely doing pretty well," notes Ian MacRae, a compensation consultant in Hewitt's Toronto office. "Not only are they receiving higher salaries than their counterparts in other locations, they're probably receiving a range of special compensation arrangements to ensure they stay with their employer."  

Compensation aligned with business objectives
Even employees who don't have hot skills or work in hot locations may have an opportunity to gain additional income over and above their base salary. "Eighty-six per cent of employers provide variable compensation programs," says MacRae. "Employees receive a bonus if certain corporate, divisional and/or individual goals are attained."

However, employers are finding that creating and implementing a successful variable pay program may be harder than it seems. Two-thirds reported difficulty in designing pay programs that give employees a clear line of sight between their achievements and their reward. In addition, 61 per cent cited enabling managers to have effective pay conversations with their reports as a challenge.

"Successful variable pay programs have the ability to help employers drive business objectives, as well as keep employees focused on their goals in order to realize their earning potential," explains Vathje. "The program must, of course, be designed appropriately and administered properly. However, it is also critical that employees understand how the variable compensation plan works. Without a clear grasp of what they need to accomplish in order to help the organization succeed and be rewarded themselves, the program isn't going to work. Employers run the risk of losing key talent to competitors that appear to pay more when that happens."

Copies of the Hewitt Associates' 30th Annual "Canada Salary Increase Survey" are available at www.compensationcenter.com.

Human resources professionals need to pay close attention to the ways International Financial Reporting Standards (IFRS) will affect compensation plans, training and retention of key resources, Ernst & Young says.
"With IFRS conversion slated for January 2011, it's time to start thinking about these crucial issues now," says Bruce Sprague, Ernst & Young Human Capital partner. "In many business sectors, IFRS will change earnings, earnings per share, and financial position; which will impact the entire organization."

Incentive thresholds might be met (or become unachievable) as a result of IFRS adoption simply because reported metrics could change, including those used for incentive compensation thresholds such as income, revenue, and net asset value.

So, where should human resources start? Ernst & Young suggests the following five key areas to help HR professionals get going on IFRS.

1. Compensation committees will need to work closely with accounting and management functions to understand the new processes' potential impact on remuneration.

2. A shortage of trained IFRS resources is another significant challenge companies will face. Since comparative data will be required as early as 2010, companies need to act now. Does your organization have enough manpower to handle IFRS conversion? Numerous areas of the company, including information technology, may need additional people on hand, especially over the next few years. And IT specialists are already at a premium in Canada, especially those who understand accounting implications.

3. The next generation of accountants and finance specialists will need to speak fluent IFRS. Universities are adapting their curriculum - but are companies offering the training required? It's time to start integrating IFRS seminars and professional development into the finance departments of Canadian companies.

4. Human resources committees might also want to develop succession plans for key IFRS-trained technical resources, and revisit the company's compensation strategy. This could help reduce the risk of losing key finance people.   

5. Last but not least - human resources should be working with their communications counterparts to ensure any HR changes resulting from IFRS get the talk time they need now, and that everyone understands what's happening, and why.

The new standards are quickly becoming the reporting benchmark in many parts of the world. To date, more than 100 countries either require or permit the use of IFRS, including Canada. It's a major change management project that can reach into all corners of a business. The best advice regarding the timing of the conversion project is to start as early as possible.

To learn more about what human resources teams need to do now to prepare for IFRS conversion, visit www.ca.ey.com. 

Due to a tightening economy and labour market, employers plan to award average base pay increases of 3.8 per cent in 2009, slightly less than the 4.0 per cent increase granted in 2008, according to the 2009 Canadian Compensation Planning Survey from Mercer. Pay raises are significantly higher, however, for employees in regions with high-performing industries.
 
The current edition of Mercer's survey, which has been conducted annually for more than two decades, includes responses from more than 485 employers in Canada and reflects pay practices for more than 850,000 non-unionized or a total of almost 1.7 million workers.
 
Variation by industry
Increases to base salaries differ considerably by industry reflecting their performance. Compared to the expected average national pay increase of 3.8 per cent in 2009, Canadian employers in high-performing industries plan to grant salary increases that are about 40 per cent higher. Oil and gas and natural resources are the highest, with projected pay increases of 5.4 and 4.2 per cent respectively for 2009.  In contrast, durable manufacturing and transportation are expected to award less-than-average pay raises in 2009 at 3.4 per cent.  
"Clearly the uneven economy is having an impact on human capital and compensation strategies," says Iain Morris, principal at Mercer. "Alberta's economy, led primarily by the energy and natural resources sectors, continues to boom and employers are granting higher pay increases to reflect this growth. Organizations in other areas, such as Ontario where the manufacturing sector is struggling, are facing the challenges of a tightening economy."
 
Attracting and retaining employees
Regardless of whether organizations are experiencing talent shortages or job losses, they recognize employees are their best competitive advantage as they strive to grow their businesses. According to Mercer's survey, organizations are utilizing cash-based approaches, such as signing bonuses, spot cash awards and retention bonuses to hire and retain key talent.
 
"Although these cash-based strategies are quite effective in solving immediate needs, a more holistic approach to total rewards - one that considers base pay, variable pay, benefits and career development - is critical for maintaining a competitive advantage in the marketplace," says Morris.

Mercer is a leading global provider of consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. It is a leader in benefit outsourcing. Mercer's investment services include investment consulting and multi-manager investment management. Mercer's 18,000 employees are based in more than 40 countries. For more information, visit www.mercer.ca .

For more information or to purchase the full report of Mercer's 2009 Canadian Compensation Planning Survey, visit www.imercer.com/cps or call 800-631-9628.