Canadian HR Reporter Weekly

3 Canadian HR Reporter, a Thomson Reuters business 2018 January 17, 2018 a risk you may be willing to take," she said. "But it's a double-edged sword, where all of a sudden you get into employee morale issues… it goes all against the advice that us in the HR world are really advising our clients to do, and what we've been advising forever." Consideration of long-term impact is critical, said Ferguson, as each decision on compensation is sure to send waves through the organization. "We're saying to our clients: 'All of your policies and practices need to be reviewed, and really think everything through before you make a change,'" she said. "'Brainstorm. ink outside of the box long-term as well as short-term. Don't act too quickly if you don't have to.'" "'Really take your time as much as you can. Get some professional advice where need be.'" With retention in mind, employers may want to award wage increases to valued employers earlier than necessary, said Ferguson. "If you look at the fact that it may be more difficult to replace those roles, then people are making that decision to increase a bit," she said. "It's a huge ripple effect." Wage compression experienced by those making slightly higher than minimum wage is part of the ripple effect employers face in these situations, as those workers may also require a pay raise, said Janet Salopek, president of Salopek and Associates, an HR consultancy in Calgary. "We need to have a spread, in order to be fair and equitable, between the employee level and the next level up," she said. "It has that cascading effect… It also has a huge impact on your overtime — it's not just that hourly rate." HR practitioners at small or medium-sized businesses need to encourage calm, strategic decisions on this issue, said Salopek. "ere's not a golden nugget," she said. "ink it through, pause, take time and do your homework. Check with your peers within the sector that you're in… take your time to look at some alternatives and to plan. ink about the long-term impact that you're going to make, relative to the changes that you have to do because of the increase." "Don't just look at your labour costs. Look at your whole business costs. Uncover every rock to look for potential savings." And if a reduction to employee benefits or perks remains the most effective option, "communicate, communicate, communicate," said Salopek. "If you have to make changes, take time to engage, and talk to your staff. Give them lots of notice," she said. "Engage your employees in what's important to them and what's not. If you're going to make cuts to your benefits, try to understand if there are aspects of your benefits that maybe your people aren't using, then cut there first... It doesn't need to be complex." Social media, legal risks Transparency and open communication can significantly aid an employer making alterations to pay grades, said Salopek. ese are also a necessity in an age where social media allows individuals a platform to share workplace concerns. "Be transparent and fair when considering reducing labour costs, because it's the right thing to do, and all it takes is somebody to go on Facebook or do a tweet and it has such a negative impact on your value proposition, on your branding," she said. Not only could a negative, knee-jerk decision affect sales, but future recruitment prospects could also dampen as a result, said Salopek. Before making a decision, think about all of the different ramifications, said Ferguson. "Social media would definitely be a part of that. It very much depends on what people are listening to. Our millennials are very social media-attached, and there's lots of news going on that's going to impact everything." Litigation or employee unionization could also result if changes to compensation are too significant, according to Salopek. "If you cut an employee's compensation… if you significantly reduce the compensation package, you could face an allegation of constructively dismissing that employee," she said. All decisions on wages, benefits, bonuses, or reductions in hourly pay should be passed by a legal team prior to implementation, said Salopek. Employers have to be cautious and ensure they review any contractual obligations with employees, to ensure they remain in line with decisions being made, said Ferguson. Don't just look at your labour costs, look at your whole business costs." Protesters gathered at several Tim Hortons locations in Ontario in January after word spread that some franchisees were making cuts to employee benefits after the minimum wage hike. Credit: Ontario Federation of Labour

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