Over There — Pay Raises Are Good

Workers in Bulgaria, Ireland will get hefty salary hikes in 2003, survey says. Plus: is race still a big factor in hiring? Apparently.

Despite continuing economic uncertainty, employers in most countries plan to increase worker pay next year by 1 to 3.5 percentage points above inflation. This, according to Mercer Human Resource Consulting’s Global Compensation Planning Survey Report.

In most countries, projected pay increases for 2003 won’t be much more than a few percentage points above the annual inflation rate.

There are some standouts, however: Take Venezuela, where raises are expected to be around 7 points lower than inflation. Bulgarians, by contrast, will be flexing their buying muscles, with pay raises almost 11 points above inflation.

Besides Bulgaria, the big winner for Europe-based workers is Ireland, where the average employee pay increase is expected to be around 6.4 percent. Not bad, considering inflation in the E.U. is expected to range between 1.5 percent and 3.8 percent.

On the other side of the globe, Japan forecasts pay increases of 2.7 percent. That’s not too shabby, considering Japan is currently enduring a deflationary spiral, with a 0.2 percent inflation rate (that’s the lowest rate of any country in the Mercer study).

Meanwhile, U.S. employers predict pay increases of 3.9 percent next year, with inflation projected to be at 2.3 percent. That tends to jibe with other salary forecasts that have been released in recent weeks, including projections from The Conference Board, Buck Consultants and Deloitte & Touche.

Of note: Inflation figures for the Mercer report come from the International Monetary Fund and the Organization for Economic Cooperation and Development. Compare that with the Conference Board’s inflation projection for the U.S., three percent.

“The outlook for 2003 is broadly positive,” says Mercer consultant Gareth Williams. “But this prediction assumes some element of global economic recovery which, in turn, will depend on stable international relations.”

Hiring: 2002 or 1952?

Many corporate managers like to believe that, in this enlightened age, race discrimination is a non-issue. But according to an article last week in the New York Times, research by business professors at Massachusetts Institute of Technology and the University of Chicago, that’s just not so.

According to the Times, Marianne Bertrand of Chicago’s Graduate School of Business and Sendhil Mullainathan of MIT’s Sloan school answered 1,300 help-wanted ads from newspapers in Boston and Chicago with phony resumes. In those C.Vs, the two used bogus names that are particularly common among African-Americans In other job applications, the two professors used names commonly perceived as “white” names.

Four resumes were typically submitted for each job opening; in all, almost 5,000 applications were submitted from mid-2001 to mid-2002. No single employer was sent two identical resumes, and the names on the resumes were randomly assigned, so applicants with black- and white-sounding names applied for the same set of jobs with the same set of resumes. Other than the candidates’ names, all applications had the same education, skills, and experience.

Then Bertrand and Mullainathan tracked which candidates were invited for job interviews. The results?

Disappointing, to say the least. Applicants with white-sounding names were 50 percent more likely to be called for interviews than were those with black-sounding names. Interviews were requested for 10.1 percent of applicants with white-sounding names, while only 6.7 percent of those with black-sounding names got called in.

Even more disturbing, says the Times is that for white-sounding applicants with credentials — like experience and honors — the chances of getting an interview increased dramatically; on the other hand, those with black-sounding names with credentials, enjoyed a much-lesser advantage.

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