SALARY RANGES

Corporate America: How to Re-Establish Trust

APCO Worldwide conducted a survey last year looking at the issue of “re-establishing trust” and the role communications plays in building value. The report mentioned that all of an organization’s stakeholders are involved: employees, customers, suppliers, communities/charities state/corporate pension funds, shareholders and elected officials.

The research results were eye-opening and yet not surprising considering the issue was credibility and trust. Here are excerpts:

Are Corporate Executives Honest?

No = 67%

Compared to an average person, is a typical CEO more honest and ethical, or less?

Less honest and ethical = 71%

Do you have confidence that financial information from companies and investment houses is straightforward and honest?

No confidence = 70%

Is this a case of a “few bad apples” in an honest system or a widespread problem where executives are taking advantage of a failing system?

Widespread problem = 61%

Can new legislation/regulation have a major effect on correcting the problem of corporate corruption?

Yes = 66%

The study raises a fundamental question: “In response to these breakdowns is the legislation that is now in place (Sarbanes-Oxley, for example) enough to win back lost trust?”

Their answer is a clear “no.”

The thesis of the study is that in this new environment, corporate purpose may have changed and that business and society can no longer be separated. “Is it that major corporations are viewed more as political institutions that are founded on trust, are constituency-based and maintain their position by public consent?”

These are the qualities of the constituency based organization per the study, and tracks closely with the needs of an organization committed to responding to the new paradigm:

• Constant communication to build alliances

• Engagement [bringing key partners together to collaborate on the basis of common interests] vs. Management [top down, directives]

• Either define [the organization to key publics] or be defined [by outsiders with their own agendas]

• Cannot hide; always face adversaries who demand more or different

• Exist for the public good based upon stewardship of resources vs. Earnings Per Share

The study persuasively makes the point that reputation translates to the bottom line and that the perceived quality of management replaced Earnings Per Share Growth as the number one factor for US Money Managers.

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Changing Values that Should be Addressed in the Workplace

Before an organization can respond to this changing business climate, the leadership team needs to needs to grasp the depth of the change, how fundamental it is and how it is impacting the entire organization.

Their stakeholders, whether they are employees, customers or vendor/partners, have a basic need for safety, trust, honesty, normalcy, and emotional support. In such uncertain times, people want regular, credible information to build back their confidence (in management) and to feel their workplace is as safe as it can be. Responding to those same needs, people are purchasing family homes or remodeling them and refinancing for that purpose (thank heavens for Alan Greenspan).

At a time when stakeholders need more communication and support, business leaders are distracted. Managements are confronting issues that can put the organization out of business. It is hard for employers to focus on the less immediate issue of employee “morale” when the organization is under siege. In these grueling times, cost cutting, staff losses all lead to increased pressure to do more with less. Stress creates tunnel vision.

The messages that employees should be hearing, to help restore their confidence, should be a high level priority. Yet, these needs are not being met with supportive organizational plans or in many situations not addressed at all. Instead employees are being asked to work harder for less.  Communications professionals are being stretched thin as staffs are trimmed while the workload seems unchanged. They are feeling overburdened and stressed. Once the economy begins to show signs of a consistent recovery, I expect there will be a shift from so-called high stress posts to “medium track” positions where the workload is less demanding.

Particularly when people are feeling fragile and insecure, they seek balance in their lives between work  and family. They resent the extra tasks on the job that keeps them from being home at a reasonable time. Moreover, many employees are disillusioned by the cuts they have seen and how former employees have been treated. They are not inclined to throw themselves into their work, just when employers need that level of productivity. During stressful times, listening skills are at their worst and people have very limited attention spans.

For communications professionals the burden is particularly heavy since they are advocates for the organization. How they would prefer to treat colleagues, vendors, partners, etc., in line with personal values may simply be impossible in a lean organization with so little time to “do the right thing.” In general, people in our field are not having fun and are tackling their work with grim seriousness. If an individual has a good job, s/he is making every effort to keep it. This is not the moment to take a sabbatical and expect to rejoin the workforce in a year or two. Times are still too uncertain to feel confident about the near term future.

Once the market becomes more robust which I forecast is about a year away, I think there will be a wealth of job changes as communications professionals make the career decisions they have delayed for the past two+ years. These might include lateral, less demanding lower paying work, as well as promotional opportunities.

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Judith Cushman & Associates Creates a New Consulting Division

It has been several months since my last newsletter and in that time, I have changed my business model. In addition to the retained search options that I have offered for over 25 years, I have now established a consulting services division.

As the market slowed, I realized that companies needed flexibility to meet their staffing requirements. Retained search work is just one solution. For many years I have been involved in analyzing corporate cultures and how the communications/IR/marcom functions fit organizations. I felt corporate officers (either supervising the function at the CEO level or the head of the function) could benefit from my perspective and analysis before deciding if a position should be filled. I would then create a position description on a consulting basis and the organization could move forward by filling the post on its own. Or, my firm could be retained to tackle the remainder of the project.

This consulting approach has been successful and taken on a life of its own. I have been involved in a variety of projects:

• worked with the head of communications to define his position and then create the job description for a new post reporting to him

• collaborated with the owner of a boutique consulting firm as she advertised to fill a position. I then winnowed down the list to a key group of candidates, phone screened and recommended that she meet  less than five professionals. Finally, I suggested a unique compensation program so that she could hire the most senior candidate she had ever brought on board.

• teamed up with HR and the hiring manager (head of communications) to review resumes and recommend the most suitable candidates for the post. I interviewed that group and saved the hiring manager countless hours by recommending less than 5 be considered (and a hire was made).

• worked with a CEO and his direct reports to determine the direction, definition and qualifications needed for a new position. Originally conceived as a media relations post, the description shifted the focus to Public Affairs initiatives and a strategic role for the function.

• retained by a CEO to coach a highly talented, valued employee about career directions and options that fit her skills and was most rewarding to her.

These have been challenging assignments along with the search contracts I continue to fill. I have also determined that I enjoy the “hands on” consulting and search work rather than delegating and managing the projects. My goal is to take on only the assignments I can reasonably handle myself with support staff.

The jobs portion of the web site is different since our model has changed. We are listing current assignments and updating the status of the searches on a weekly basis.

I will be attending the National Investor Relations Conference (NIRI) in June in Florida, please let me know if you will be there. I will also be speaking to the LA Chapter of NIRI in May and to PRSA in Houston in October.

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The Market

No one knows how long and how difficult the war in Iraq will be. Everyone I have talked to says that if the fighting is of relatively short duration, the recovery that was underway will continue. Until the war started a number of clients said they were only making necessary short-term business decisions and taking a “wait and see” attitude. In the communications/IR/Public Affairs areas, that attitude impacts positions where new market initiatives are involved. Nevertheless there are jobs that cannot be left vacant due to on-going programs or key staff losses. Top positions in agencies and corporations are being filled, although the pace has slowed and in some cases, temporarily put on hold.

Before the war, there was a sense that the worst was over and we could cautiously begin to look ahead and plan for the economic recovery. Assuming a relatively short campaign in Iraq, I think we are still a year away from being on sound footing. Hiring traditionally lags behind by 6-months.

Corporate jobs that will be filled in the first wave of the recovery are those that have been frozen but that are still needed to relieve staff of the overload they have carried during the recession. These are generally solid mid-level posts that are clearly defined and can be readily filled. Next are jobs that add to the headcount and reflect needs in new areas where a specific expertise is not available in-house. Third are the positions that meet new growth initiatives and that only make sense to fill if economic forecasts support proactive investment in staff to take advantage of those opportunities. These posts usually require both strategic and leadership capabilities and are at the Director level and above.

For agencies, hard hit by the loss of technology clients and downturns in other sectors, hiring will lag behind corporations as agencies attempt to return to higher levels of profitability. Moreover, with the changing needs on the client side, for more sophisticated and less tactical basic product publicity work, agencies will need to adjust their business model. Corporations that have received poor service from agencies during boom times, are not rushing to outsource work. Agencies will be striving to find areas of expertise that cannot be cost-effectively duplicated by in-house staffs. The trend to establish litigation, crisis, Investor/Governance Practices all reflect the shift to value-added services.

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Convergence:

The Growing Need For Broad, Cross-Disciplinary Experience

As companies become more sophisticated or more embroiled in difficult communications issues, it becomes clear that a unified messaging strategy is critical to being effective with stakeholders, customers, legislators, investors, employees, the communities they impact and the media/analysts that influence perception. In the Investor Relations area, with the loss of corporate credibility and the new Governance regulations mandated by Sarbanes-Oxley, the link between corporate communications and IR continues to tighten. Governance, ethics and reputation responsibilities are just beginning to be added formally to IR and Corporate Communications functions.

The VP of Corporate Communications who once found his/her IR counterpoint out of the CFO’s office, is now making a case for having IR as part of the title. Putting the two functions under one Vice President is making more sense.  That trend will continue and in some cases the IR, VP will add corporate communications and in some cases it will be just the reverse situation. While there is a case to be made either way, the decision will turn on strategic capability and leadership of the incumbents. If neither is determined to be strong enough given the complex business issues the company is facing, then that expertise will be found outside the organization.

Branding (with its attendant Marcom responsibilities) is another critical issue for companies intent on building a loyal customer base. This function has traditionally been outside of the corporate communications function. Yet, the two areas focus on the same objective and, now in sophisticated, larger organizations, are being brought under a single Vice President. It is a challenging role to assume and very few professionals have the breadth to effectively take it on.

The convergence of technology and consumer Public Relations is yet another example of the trend. The ability to translate the advantages of technology to the consumer in user-friendly terms is essential. Conversely, as consumer products become more technical, explaining the benefits and product differentiators is critical, as well.

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Salary Ranges

Compression and confusion mark the movement of compensation levels as the recession takes its toll.

Candidates who have lost their jobs are expecting to move laterally. I have also had job seekers say that compensation is secondary and the actual position is far more important, indicating that they would drop down one level and accept a reduced salary. Qualified and clearly overqualified candidates are competing for the same job. At the other end of the spectrum are candidates who are currently employed and who feel a move is a high risk proposition. They will consider a new position only if there are compelling positives and an attractive compensation program.

A recently concluded national search at the VP level attracted numerous professionals with excellent credentials. If a candidate determined that the position fit his/her career goals, the compensation level needed to be adequate, meaning the total offered represented a modest increase over current compensation. Factoring in the cost of a relocation (finalists were from out of the area) the first year’s total compensation was equivalent to a lateral move. In a market where relatively few good corporate opportunities have become available, it became clear that there was a willingness to listen even if the salary range was barely acceptable. Just a few years ago the situation was reversed. Unless the money were truly a “step up” it would have been impossible to interest candidates in even an “exploratory interview.”

As we emerge from the recession, the talented out of work professionals will be hired first, probably below their actual market worth. These will be temporary perches and as soon as they can, will move to  jobs that reflects an excellent use of their talents for a significantly higher total compensation package. The market will normalize in that second wave as companies begin to add staffs that represent growth for the department and as agencies cautiously deepen practice areas that are showing potential for revenue gains.

Salaries and total compensation have declined or stabilized at the lower end of established ranges from their highest points of just a few years ago. Vice Presidents in mid-sized companies or at Divisional levels are at or above $165,000. Corporate VP’s vary tremendously from $200,000 and up. These figures reflect a decline of roughly 20%. 

Directors were once compensated at $150,000 and above. A more normal figure is now $125,000 (with upward flexibility).

Mid range posts, both agency and corporate, are at a salary range from $60-$80,000.

Account Executives/Senior AEs in smaller markets earn less than $40,000 while in larger cities the figure may range upwards of $50k+.

I expect these ranges to remain stable for the next year.

Stock is generally not considered an attractive feature of an offer. So many candidates have lost all the value of their company stock that they downplay the financial benefits of this element of the package.

Annualized cash bonuses, sign-on bonuses, and short term incentives are considered more desirable than stock.

Generous Benefits programs with excellent family coverage and low monthly premiums are increasingly important (and at one time considered a minor part of an offer).

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