August 13, 2008 in Business

Combining jobs, cutting salary

Companies manipulate pay, positions as they try to cope with weak economy
By DANA MATTIOLI Wall Street Journal
 

Some job hunters have been encountering a new kind of downsizing: companies that aren’t eliminating positions entirely, but are combining a mid-level position with a more junior one – then advertising it as a junior slot and offering a lower salary.

In other cases, more-senior persons are being hired, only to find that they are charged with handling both their own work and the tasks that once fell to subordinates.

It’s just the latest in a series of changes companies are making to adjust to a weak economy. Earlier this year, companies initiated buyouts of senior executives with big salaries. Some firms have downgraded full-time employees to part-time status, and others have adopted a consolidated workweek in an attempt to reduce office costs, says John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas.

“They’re looking for people to wear multiple hats but only pay one salary,” says John Robeda, a 30-year-old product manager for an agribusiness company in Colorado Springs, Colo., who has noticed the trend since he began searching for management and marketing positions in January.

The trend also has affected financial services firms, which are increasingly combining information technology jobs to cut costs, says Katy Winter, a permanent placement coordinator at Sapphire Technologies Inc., a global staffing firm. Many of Sapphire’s clients are seeking IT developers skilled in fixed income as well as derivatives and equity-trading platforms, whereas in the past they sought candidates experienced in each of these areas for three different jobs, she says.

“They’re looking for a jack-of-all-trades,” says Winter, whose clients include a number of top tier financial services firms.

Recruiters say the trend is accelerating as earnings sink and companies scramble to cut costs any way they can. “Throughout every economic downturn, there’s a contraction in the U.S. economy, and firms rethink how they organize themselves,” says Clark Beecher, managing director of Magellan International, an executive search firm based in Houston. “They will bring in one person to do three people’s jobs and stretch their assets.”

Recruiters also say they are seeing an influx of entry- and lower-level job candidates and employers are taking advantage, figuring that younger workers might not notice – or might even be grateful to take on a job with more responsibility than the typical lower-level position.

But for Walter Beaver, a 41-year-old computer services technician from Northglenn, Colo., the disparity between job titles and responsibilities is disconcerting. Beaver, whose current employer has filed for bankruptcy, has been searching for a job since April.

He applied for a position labeled “systems administrator 1,” a title equivalent to his current position. But once he viewed the tasks of the job, it was clear that it required someone with the skills of a mid- to senior-level administrator.

“On the listings there’s a page and a half of qualifications and responsibilities for a job, and then you get to the pay and it’s $28,000 to $32,000, and you’re like, ‘Are you kidding me?’ ” says Beaver. He says the job should have commanded a salary $10,000 higher.

Other companies are extending the strategy to more-senior hires, bringing people on board to fill both a management role and handle support. Alister Wellesley, CEO of Manhattan-based executive-search firm Wellesley & Partners, recently placed a chief marketing officer but said the terms of the title are different than what they would have been a year or two ago. Although he had a grandiose title, he also was expected to handle the mundane media tasks of the marketing department, he says.

Wellesley says he has also seen a trend in the past few months of executives being hired for a high-level job with a big title but then told they can’t hire a team to work for them, leaving the new executive to handle lower-level tasks once performed by assistants and junior managers.

Hillel Tropper, executive vice president of CODA Resources, a Brooklyn-based contract manufacturing firm, recently replaced his office manager and warehouse manager with one person. He says the move saved him about $50,000. Tropper says the new arrangement is working out nicely, but admits he checks in often with the new employee to make sure he isn’t overwhelmed.

“It’s a lot for one person to do, but we’re pretty confident (he) can handle it,” says Tropper. “So far everything is working out well.”

It’s more than just small companies trying to capitalize on the economy by mislabeling or combining two demanding jobs, says Stephanie C. Harper, a human resources manager at an Atlanta-based human resources consulting firm. “When you actually read the job description or talk to the employer, they want you to move mountains,” she says.

These measures may help companies cut costs today, but they tend to backfire in the long run, say human resource experts. Having one person fill the role of two or three people risks burning them out and can also affect retention, says Jeff Wittenberg, chief leadership officer at Kaye/Bassman International, a search firm based in Plano, Texas. “If that new person decides to leave, you have to run ads, possibly engage a recruiter, offer (new employees) more money and train them,” he says.

When jobs are poorly combined, the strategy can also be bad for the firm, warns Amy Armitage, a partner at Capital H Group, a human resources consulting firm based in Chicago. “You’ve got to look very closely at what jobs are being cut and ensure you don’t cut into the bone, into the things that are really adding value to your customers and to what’s really creating the growth engine of your company,” she says.

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