Competitive Pay Key to Keeping WorkersIn today's tight job market, employers are having difficulty finding and hiring qualified workers. As a result, this focuses more critical attention to employee pay. Competitive pay is one of the keys to attracting and retaining qualified workers. In fact, several popular news stand magazines recently devoted cover stories to this very topic, with one publication suggesting to readers that "Now is the time to change jobs." The message was this: most firms are continuing to provide pay raises in the 3-4-5 percent range, but you can probably get a ten to twenty percent pay increase by changing jobs.
Career counsellors caution job candidates to evaluate the total employment package and to not just jump at a high pay rate. Compensation specialists suggest that high salaries alone do not asssure a productive workforce. However, competitive salaries together with good benefits and a positive working environment help significantly in maintaining a productive and motivated workforce. Some managers and business owners see salaries as a major expense item which directly affects the bottom line. They point to the many empty factories, now razed to make way for shopping centers, where high paid manufacturing workers were once employed. But, paying too low contributes to selection of less qualified workers, higher turnover, greater recruiting expenses, added training costs, and even more ovetime pay as existing workers perform extra tasks due to job vacancies. Most business owners say that they try to provide competitive pay for workers. However, many of these firms fail to have a formal salary program in place to assure uniform fair administration of pay. An effective compensation plan should consider direct salaries and indirect compensation or benefits. Compensation specialists suggest that the plan begin by defining job responsibilities into job descriptions, then objectively evaluating or ranking job levels, conducting a pay study to determine competitive pay levels, and defining pay ranges. There are variations in pay from one organization to another. Pay differences occur because of industry, location, public vs private sectors, profit vs non-profit sectors and union vs non-union facilities. An individual's pay may vary because of occupational choice, education, experience, possession of certifications or other credentials, job performance levels and length of service. Employee salaries can represent from 40 percent to 90 percent of a business' operating expenses. Clearly, salaries do affect the bottom line. The fair administration of salaries is an important management responsibility. For a free copy of Mr. Hubbartt's "Ten Tips for Discussing Salaries," Contact Mr. Hubbartt at WSHubbartt @ Hubbartt.com or by voice mail at 630-513-9494.
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February 2000 © KANE COUNTY CHRONICLE
Reprinted with permission
