Market Reality

I ran across an instructive quote in the weekend's Wall Street Journal.  It's meant for a broader discussion of the market, but I think it also has particular application to the world of compensation, pay level setting and wage regulation.  From P.J. O'Rourke's remarks at Radio Free Europe in Prague (and published in the WSJ's Notables & Quotables section, subscription may be required):

The free market is not an ideology or a creed or something we're supposed to take on faith, it's a measurement.  It's a bathroom scale.  I may hate what I see when I step on the bathroom scale, but I can't pass a law saying I weigh 160 pounds. 

The market forces that drive compensation levels for various roles, skill sets, certifications and backgrounds are moving in ways that are more dynamic and less predictable than what we are accustomed to.  This will present us with many challenges, at the organizational talent management level as well as at the collective policy setting level.  We can paddle furiously against the market flow by passing laws and driving efforts to change these patterns, particularly as they impact certain classes of people or certain businesses.  Or we can dedicate our energies, efforts and available dollars toward helping people recognize, prepare for and ride out the turbulence as successfully as possible - so that employees can maximize their earning potential during their working lives and their employers can secure the talent needed to survive and prosper.

I know what makes more sense to me. 

Comments

[Mark Stelzner]

Terrific post Ann. In your opinion, are the traditional compensation vendors equipped to handle the elasticity that new market conditions demand? Are annual surveys enough or do we need to see much more flexible and timely representations of the so-called "new normal"?

[Ann Bares]

Mark:

Thanks! A really excellent question. I think we're poised at the beginning of a revolution in how market pay data is collected and delivered. Some survey providers are already providing some degree of regularly "refreshment" in their data and making it available online, moving away from an annual report format. I think this is the beginning in a whole chain of innovation that's bound to hit the pay survey business at some point.