Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: paul e thomas who wrote (7198)	10/28/1997 8:19:00 AM
From: BM	Respond to of 13949

Government [CDN] offers 17.3% package to computer staff Tuesday 28 October 1997 Kathryn May The Ottawa Citizen In a move to plug its brain drain, the federal government will spend an additional 17.3 per cent on salaries and bonuses over two years for its 8,400 computer specialists. The tentative two-year deal, reached after a marathon of around-the-clock negotiations, is considered key to stopping the flight of top-notch computer specialists to higher-paying jobs in the private sector. The deal was negotiated with the Professional Institute of the Public Service, which is recommending its members accept the offer. The deal would give workers a 2.5-per-cent salary increase this year, followed by a two-per-cent hike in 1998. But it's the package of incentives, which include "retention allowances" or bonuses, that goes a long way to narrow the wage gap between the private and public sector. The union has argued that government computer experts, depending on the job, are paid between 20 to 40 per cent less than their private-sector counterparts. The government now spends about $360 million a year on its in-house computer specialists. The 17.3-per-cent increase includes a wage increase worth about $16.2 million and bonuses of $31.5 million over the life of the two-year contract. PIPS president Steve Hindle said the package is built around slowing the bleeding of talent for the next two years when the demand for these workers will reach a peak in the government's rush to fix the so-called "millennium bug" so federal systems will work in the year 2000. "The deal is aimed at getting more money into their pockets faster," said Mr. Hindle. "It's not going to keep everybody, but the government hopes it's enough to slow down the exodus. It's not going to fix the problem, which will only get worse as time goes on, but they won't be losing them as fast." The government already expects to hire an extra 2,000 people over the next two years to convert the two-digit codes in its computer systems that can't read "00" come 2000. But the government expects the big demand will subside after its Project 2000 is finished and doesn't want to be stuck with high, ongoing salaries. As a result, the bonuses will be up for renegotiation should the demand not slacken off as the government expects, Mr. Hindle said. Gene Swimmer, a labour relations expert at Ottawa's Carleton University, said such a "creative package" won't be enough to lure young, highly skilled graduates but it will encourage more experienced workers to stay. Some experts argue that federal computer experts can't command the premium salaries paid in the private sector because the scope and the responsibility of their jobs aren't the same as those in the private sector, which are driven by bottom-line profits. The bonuses will be paid monthly but will be terminated when the contract expires. Although they are not part of the base salary, they will be included in calculations for pension benefits. In-house computer specialists are divided into five groups, from CS-1 to CS-5, depending on experience. The bonuses the government are offering range from a total of $3,135 for a CS-1 to $6,495 for a CS-5. The government is also offering the workers more money by offering each group an extra "increment," the staged-in annual increases that workers get until they reach the top of the pay range in their group. Workers who are at the top of their pay range will immediately get an extra increment. For those who aren't at the top, the government will bump them up two increments in an effort to fast-track them. The result is the average CS-2, who now makes $42,284 will be making $52,791 with the increase and bonus by time the contract expires. Mr. Swimmer said the government wants to avoid a big wage increase because it would set a precedent for other workers. As a result, the extra increment is a "hidden way" of increasing pay. The package also includes other incentives aimed at keeping workers for the next two years. It has altered the severance packages to entice workers eligible to retire over the next two years to stay longer. It has also thrown in six weeks' vacation for those who have 29 years of service, as well as an extra $1 per hour to compensate workers for the extra shifts and weekends the government will need to staff to meet the demand of Project 2000. The talks with the union got off to a rocky start when the government first came to the table with an offer for a two-per-cent increase. The logjam was broken recently when conciliators came in to help stickhandle the negotiations. Also, labour relations in the public service have never been worse. This offer is much richer than what has been offered to other workers since the government restored collective bargaining after lifting the six-year wage freeze. As result, it could raise the expectations of other workers. Mr. Swimmer predicts other workers won't get such an attractive package of incentives. With the shortage of computer specialists and the looming 2000 crisis, few other workers came to the table with as much leverage. But, he argued, the government has set a precedent for wage increases of at least two per cent for other workers.