Welcome to the Fall 2008 edition of our Market Intelligence Report. While we're all aware that the economy is not in the best of shape at the moment the positive news is that there are resources you can tap, and steps you can take to help you get through this difficult period until the economy stabilizes - as it always does.

We surveyed a distinguished panel of Human Resources executives representing several industries to discover what impact the economy is having on their companies, and to discuss some of the steps they are taking to keep up the morale of their organizations, retain their key executives, and reduce attrition among their staff. Their responses contained in Jeff Hunt's article "The Impact of the Current Economy on Company Culture, Morale, and Retention" are very candid as they discuss these issues and the solutions they have put in place. Their comments will provide you with ideas that you can apply to your own organizations, and may also encourage you to open a dialogue within your own company as to how you can leverage the advice you can get from your own HR leaders as your company faces addressing these same issues.

In today's volatile economy it is imperative to have a true understanding of all of the elements that make up your compensation package. This is critical information that you should be able to readily access whether you may be looking at an outside opportunity and want to compare your current compensation to a proposed offer or simply because you just want to ensure that you understand all of components that go into your annualized compensation to determine if this is a good time to diversify your portfolio or just to understand your benefits package. You will get advice on how to approach this in Fred Weber's article "Understanding Your Total Compensation".

And finally if you have made the choice to leave your company for another opportunity, a decision which we always advise to think through thoroughly, then it is essential for you to make the effort to resign from your company in the best possible way to preserve the relationships that you've worked so hard to establish. You can find pointers on how to achieve this in Gina Schiller's article "Effective Resigning - How to Make a Clean Getaway".

Our goal in this edition of The Market Intelligence Report is to help you with some of the steps you may need to take to get through this difficult period in our economy by utilizing the valuable resources you have in your HR partners; by gaining a thorough understanding of your compensation and benefits, and by offering you advice on how to effectively transition out of your old and into your new organization should you choose to make a change.

Fall has always been a season of both change and of reflection on what has already transpired so far for the year. I hope that all of you reading this issue of the Market Intelligence Report share our sense of anticipation and optimism as we move into this season.

In these uncertain times with the stock market down, the subprime mortgage crisis, bank failures, the oil crisis, and company cutbacks, we felt it was important to discover what measures companies are taking to retain key executives, reduce attrition, keep up morale, and how they have been impacted by the current economy.

In order for us to explore these measures, we contacted a select group of Human Resources leaders in a cross section of industries including financial services, residential real estate construction, public relations, and market research services. Their responses have given us invaluable insight into three relevant areas impacted by the current economic environment: Company Culture, Morale and Retention.

Company Culture:

We queried our HR panel of experts about the areas in which their respective companies have been positively or negatively impacted by the current economy. Craig Dinsell, EVP-Human Resources for the prestigious asset manager OppenheimerFunds said that "current market conditions demand innovation, flexibility, continuous improvement, determination to win but above all dedicated leadership." He said "leadership is tasked with infusing energy and enabling a strong positive culture" and "we have developed an Employee Engagement Strategy which is our plan to win through the company's commitment to providing employees with meaningful work, inspirational leadership and development opportunities in a balanced work/life environment."

At Burson-Marsteller, a leading global public relations and communications company, Celia Berk, Managing Director Human Resources Worldwide said "it's tempting to say the current economy helps lower our turnover. But, in fact, our best people always have choices and opportunities, so we never stop working on motivating them." She added "I believe that the economy has made our people more realistic about salary increases" and feels "there have been times when their expectations were not grounded in the reality of our business and industry, and while we have protected our commitment to training and development, we have certainly become more conservative in managing our costs."

Jon Downs, SVP-Human Resources for Toll Brothers, the nation's premier builder of luxury homes responded by stating that "the current economy, especially in homebuilding, has very negatively impacted our business overall. The collapse of the new housing market coupled with the Mortgage industry meltdown has obviously negatively impacted our business." Downs is optimistic that this situation at Toll Brothers will pass over the course of time. This view has been supported in part by his company's stock price which recently hit a 52-week high.

Peter Movesian, EVP-Human Resources N.A. for TNS, a leading global provider of panel-based market research, commented that "client budgets have decreased which has resulted in decreased market research, and there has been "more pressure on our own budgets and the need to identify more innovative ways to grow the business."

Morale:

Companies are continuously exploring ways to improve the morale and/or the productivity of the staff they have retained. Peter Movesian noted the importance of having key executives at TNS be more involved in decision making and engagement in the strategy, having more transparency around internal career options, and clear and practical development plans for key talent with some financial investment aligned to these plans.

Celia Berk said Burson-Marsteller is a global company, "and we have used all the emerging technology at our disposal to give people a sense that they are part of something bigger." She added "we have developed a special section of our intranet dedicated to orientation/onboarding of new employees, so they can quickly understand the company's values and strategy, and how they fit into the larger picture. In the U.S., we have a best-in-class diversity and inclusion initiative that features reverse mentoring, mentoring circles, affinity groups and awareness/sensitivity training."

Toll Brothers' HR leader, Jon Downs, commented that "morale and productivity have been kept relatively high by senior management by running a very well respected company in our industry. We are the most profitable of the national homebuilders and emphasize and herald our successes so there is a tremendous amount of pride within the company in our accomplishments. Being on a "winning team", year after year, does wonders for morale."

At OppenheimerFunds, Craig Dinsell said "we have improved the quality of communications and intensified focus on our performance management process to ensure there is a genuine dialogue around how we are doing, how we can improve, and how we navigate through changing markets. The entire company is on a goal feedback system that enables alignment. OppenheimerFunds has "provided a better architecture for training and development and renewed our focus on "competencies". Dinsell believes that adherence to its core values provides a strong basis for a healthy culture and organization.

Retention:

Companies are now recognizing that Human Capital is the key differentiator between themselves and their competition. Craig Dinsell said as a result of this OppenheimerFunds has "spent an enormous amount of time and effort on developing our people strategies, and have segmented these to focus on various employee groups," which includes "significant focus on employee engagement and the use of a strong employment brand to attract talent and retain employees. At the executive level, we have an intense focus on job positions that have been identified as "pivotal" to our success and understanding who our key talent is within the organization." OppenheimerFunds conducts a continuous dialogue around development and ensures there is a focus on implementation of individual development plans.

Dinsell also stressed the importance of building strong compensation strategies designed to retain key executive talent at OppenheimerFunds, giving executives ownership and accountability for the development of the company's strategies for growth, providing consistent two way communication and individual coaching. By continually focusing on acting in accordance with the company's core values and demonstrating commitment to both customers and employees, Dinsell feels these strategies result in people wanting to be associated with an organization that has a strong employment brand and culture.

Jon Downs of Toll Brothers commented "our key executives have been retained over the years mostly by the creation by (Chairman and CEO) Bob Toll of a culture that rewards loyalty and longevity. An additional incentive is the generous granting of stock options", and he feels Toll Brothers' benefits compare favorably within their industry.

Peter Movesian said enhanced responsibility, succession planning and employment contracts are three key measures that are helping to ensure retention of key executives at TNS. Movesian noted "we have built career development for key executives and increased their engagement in key strategic initiatives, communicating to key leaders that they may be next in line for a promotion, and in limited cases we have given retention bonuses, increased severance programs and guaranteed bonuses."

At Burson-Marsteller, Celia Berk said "the most important retention measure is attention. We believe that people may leave for more money - but they don't stay for the same reason. They stay because they believe they are on the radar screen in a way that they may not be at another firm. We actively talk with our people about their aspirations and then work hard to be responsive to them." Burson-Marsteller tracks the market from a compensation standpoint, to ensure they remain competitive.

In conclusion, we have discovered some important measures companies have taken in dealing with Company Culture, Morale and Retention issues in the current economy. Even though there is understandable concern about the health of the nation's housing and job markets, we saw a recent positive sign in the economy - the effect on mortgage rates after the Federal action to takeover Fannie Mae and Freddie Mac. And, there are signs that the economic stimulus package that President Bush signed earlier this year will extend its beneficial impact on the economy in the second half of 2008. As the economy recovers, the measures these companies have taken to stabilize their organizations will contribute to their future growth and vision.

We wish to thank our distinguished group of HR leaders for their gracious participation and thought provoking responses to our study.

You should always have a thorough understanding of your current total compensation. This information is vital if you are leaning toward accepting a new opportunity and you need to evaluate the new compensation package being offered, or if you just want to determine if you are being fairly compensated at your current company. Today's compensation packages can be complex and difficult to understand because they have so many components. All too often we have found that employees, no matter what their level may be, have been calculating their compensation from only a base pay perspective.

If you are contemplating making a career move it is important that you understand the components that comprise the total compensation being offered by both your present employer and your prospective new one so that you have the basic information you need to perform a true comparison.

Don't forget that there may also be additional components to factor into calculating the value of your total compensation; these might include stock options, stock grants, 401K plans, sign-on bonus, a company car, flex work schedules, and the list goes on. Total compensation can also include an array of benefits consisting of such things as health, vision, dental, life and disability insurance. If you don't think these benefits represent a significant part of your package's value then take the time to try pricing them out on your own - you will be pleasantly surprised to discover their actual value.

Companies have to structure their total compensation in a way to attract, motivate, and retain top talent in the ever changing marketplace. Base pay may vary widely depending on where the employer wants to be in comparison to the rest of the market and their particular industry. It may be at above, or below the industry standard and might be significantly impacted by geographic location. If, for example, you are comparing New York City to San Francisco or to Des Moines to determine the anticipated compensation you might reasonably be offered to relocate and accept a high level position you might experience a large variation in pay based on each area's cost of living differences.

In the ever evolving business world as companies change their business process either through technology, acquisitions, or an array of other factors, companies have to be flexible with their compensation structure. It should not be so rigid that as jobs change and employees are asked to assume additional responsibilities that the ability to make changes in compensation in recognition for their extra efforts is hampered. Providing recognition and tangible rewards that support performance at the individual, team, and organizational levels are important components of not only the compensation structure, but are the foundation of the culture the organization is trying to support.

To help employees gain a total understanding of their compensation packages, not only from the perspective of what the employee is earning but to appreciate the value of additional components the employer is contributing on behalf of the employee, employers may want to consider offering either a quarterly or an annual total compensation statement, similar to a bank or brokerage statement, where all components are clearly spelled out and a complete picture of the total compensation is presented. For the Human Resource department this could be a valuable retention tool, and for each employee this could be a deciding factor in how they and other key employees weigh the decision to stay rather than to move to another company.

Congratulations! After what seems like an eternity of interviewing you've just been made a fabulous offer and decided to accept what you feel is the job of your dreams. You thought that deciding to go through the rigors of the interview process was going to be hardest part of moving to the next level in your career. But in actuality the most difficult step in the process of making a career move is to tender your resignation in a way that will cleanly separate you from your current company and positively start your relationship with your new company. An effective resignation is a multi-step process:

Step One

Complete your research on what compensation you are entitled to take with you when leaving your current company. Determine how much equity you will be vesting vs. what you will be leaving behind. Are you entitled to any cash compensation in the form of bonuses still unpaid or to compensate you for your unused vacation or sick days? Know your rights before you go public with your decision to leave.

Step Two

Put together a letter of resignation addressed to your current boss covering two main points: a firm date for terminating your employment with your current company, and sincere acknowledgement of the career growth that you've experienced working with this person and the company. Make the letter brief and to the point.

Step Three

Schedule an appointment with your boss for a face to face meeting so that you can offer your resignation letter and formally resign. This is something you definitely want to do in person and not by phone or by email. Plan in advance for all of the turns this conversation can take and how you will control the conversation. Once you have made it plain that you are resigning, you can cut off much of the discussion by simply saying that the new position will provide you with the career growth that you cannot get with your current company. You do not have to offer information on how you got to this opportunity, the compensation being offered, or even details of the nature of your new role - this is where discretion is the better way to go. Have your transition plan ready to offer to your boss, and suggestions for which of your Direct Reports or peers is capable of assuming your current responsibilities and how you can help transition them as smoothly as possible. If your boss displays some hurt or anger at your announcement then you must make it as clear as possible that this was a career move, and not intended as a personal slight or because you haven't valued your relationship. Keep in mind that while you are considering what is best for you and your family -your boss is thinking about the impact of your decision on himself/herself and the company. This is a good time to express appreciation for their mentoring and to say you could not be as successful as you are if you hadn't worked for such a generous person. If during this meeting your boss asks you not to announce your decision because he or she would like to discuss this with their superiors and work out a counter offer, your best response to this is to firmly state that you are not open to a counter- offer and that you are not leaving for your new opportunity on the basis of compensation.

Accepting a counter-offer is a bad idea for 2 compelling reasons - the first is that your boss (not to mention their boss) is now aware that you were prepared to leave the company (and them) and their motivation for making a counter-offer may be solely to buy enough time to find a replacement for you - and to be able to do it on his or her own terms - which means your future career at this company is either dead in the water or severely limited. The additional potential long term damage to your career in accepting a counter-offer is that you will have created a reputation within the search industry as someone who is dangerous to send out for other opportunities as you cannot be trusted to go through with your acceptance of an offer. Retained search firms not prepared to anger or to risk losing clients by taking a chance and sending out candidates who are known to accept counter-offers.

Step Four

Now that your resignation has been extended and accepted, offer to remain available for the next few weeks as you work out your notice in order to smooth over the transition. Being gracious and helpful at this point in time will come back to you in the form of future good will and positive references. We have found many times that references have become the deciding factor between which of two finalists in a search will be extended the offer. Remember you never truly leave anyone that you've worked with behind - so leave people with as positive feelings about you as possible.

Step Five

Once your boss has been made aware of your decision, it is now time to break the news to your organization. When telling your team that you are leaving - emphasize it is for your personal career growth, and don't fall victim to the temptation of making any comments that are critical of your current company or boss. Many of these people are loyal to the company and have been loyal members of your organization. Assure them as to how you are working with your boss to effect a smooth change of control.

Step Six

If HR requests an exit interview with you, only emphasize the positive aspects of having worked at your current company. Any negative comments at this point will be seen more as a bad reflection on you and a perceived inability to thrive at this company than will be received as constructive criticism. Don't think of this as a great opportunity to vent about everything that has bothered you about working here - that's what your family and friends are for. Keep this meeting as professional and brief as possible. You may never know if these people have friends in your new company's HR organization - so you want any advance intel on you to be positive and upbeat.

Step Seven

Close the loop. Be smart and let your future boss and the search firm or the internal recruiters at your future firm know that you've put your resignation in motion. Call or email your future boss and their HR partner to let them know how much you are looking forward to joining them and your new team. This show of enthusiasm for your new role will help to ensure a warm welcome when you come aboard.

An effective resignation is one in which the people you are leaving behind are genuinely sad to see you go, your new team is happily anticipating having you join them, the search firm is proud to have matched you with a valued client, and you know that no matter what direction your career path takes you in the future that any of these people would welcome the chance to work with you again. All of the work you do in making this happen will be well worth the extra effort.