Now that I have your attention, as the ongoing global recession continues to dominate the headlines, I thought we would take a moment to assess its impact our industry and, ultimately, our wallets. Almost across the board, corporate bottom lines have been hit hard by the downward pressure on the markets and economy. I have a pretty good idea of what this means salary-wise in the quantitative sector, but I would love to better quantify it.
While I do see signs of recovery around the corner, the salary picture is not very pretty at the moment. As growth has stagnated, companies have looked to cut costs and, in the process, few have been able to leave their compensation packages unscathed. In addition to the stingier perks and scarce relocation dollars that we’ve discussed before, quantitative professionals have seen their gross compensation negatively affected in a variety of ways:
• Salary Freezes — Corporate and government employers world wide have instituted indefinite salary freezes as a first-line defense in the troubled economy. One candidate recently told me that it had been two years “and counting” since her last increase. Surprisingly, however, some segments are still rewarding employees with increases, including much of the pharmaceutical industry, consumer packaged goods firms, and some smaller consulting operations. We have even heard reports of increases at some countercyclical retailers.
• Salary Reductions — A handful of hard-hit industries have been forced to reduce salaries. Smaller firms with small client bases often institute salary reductions as a means of survival, though we have found that most have tried to limit reductions to senior level employees.
• Furloughs — Furloughs, or unpaid days off, have also been used to reduce expenses, and they are particularly common in government arenas. Some non-government industries are also using furloughs as a means to avoid broader layoffs.
• Elimination of 401K Match — 401K matching programs have been popular incentives for corporate employees for decades, but this year, countless companies have reduced or eliminated this perk entirely in an effort to buttress the bottom line.
• Bonus Cuts — Unless you are lucky enough to be working in one of the few flush industries I mentioned earlier, I expect most bonuses to be slashed or eliminated until the economy rights itself.
No one knows yet what the longer-term implications of these cost cutting moves will be. The good news is that, with a few exceptions, I am not hearing about layoffs the way I did in the first and second quarter of the year, and pay cuts are no longer happening. In our industry, we are seeing a higher level of job-market activity, and many candidates who have been laid off for several months are finding positions or closing in on options.
Recently the New York Times reported that people who have lost jobs are “struggling terribly” to find new situations and that “Many experts envision a jobless recovery, in which the economy grows but job losses persist.” While I do not want to minimize the pain of layoff victims, this is not the experience of my circle of candidates, who are finding options, actively interviewing and accepting jobs. While I anticipate a significant upturn in the job market in the next six months, employment rates and salary are both lagging indicators, so it may take some time before our compensation packages begin to reflect any improvement in the economy.
As always, I encourage you to continue to network, through good times and bad, so when the upturn comes, you are in the best possible position to take advantage of it.
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