Competitive Pay Key To Keeping Workers
According to a recent U.S. Department of Labor report, workers in white collar occupations earn an average of $21.74 per hour ($45,219) while blue collar pay averages $14.29 hourly ($29,723). The Labor Department reports that workers in service occupations average $10.75 hourly ($22,360). These findings are reported in the Department's Area Compensation Survey for the Chicago-Gary-Kenosha area. (see below)
In 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 counselors 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 assure 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 overtime 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's salaries can represent from 40% to 90% of a business' operating expenses. Clearly, salaries do affect the bottom line. The fair administration of salaries is an important management responsibility.
What is Your Job Worth?
Listed below are average hourly earnings for selected jobs in the Chicago area as reported by the U.S. Department of Labor:
Engineers $30.98
Computer Systems Specialists $27.65
Health Occupations $22.51
Teachers $30.24
Electronic Technicians $18.42
Accountants $20.42
Sales (outside) $32.91
Sales cashiers $7.90
Accounting Clerks $12.00
Data Entry Keyers $10.02
Machinists $20.13
Machine Operators $11.93
Stock Handlers $9.21
Food service occupations $7.49
Source, U.S. Department of Labor Area Compensation Survey. Chart compiled by W.S Hubbartt.
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William S. Hubbartt is president of Hubbartt & Associates, a St. Charles, IL consulting firm specializing in employee compensation, employee handbooks, personnel policies and supervisory training. (www.Hubbartt.com) Mr. Hubbartt is author of The New Battle Over Workplace Privacy, published by AMACOM Books.
