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How Much Should You Pay Your Employees?

(5-7 minute read)

The momentum of projects, deadlines, and daily obligations inherent to a workplace are enough to sometimes postpone any real wage analysis by supervisors and human resources staff. However, your salary or wage structure can, in a very silent way, stop all your momentum dead in its tracks should your company not be staying abreast of your industry’s wage trends and standards.

One of the most common miscalculations by supervisors and managers is putting off employee and job evaluations until they find the time to do it. Ideally, there should be a timetable put in place to review all your staff’s duties, performances and wages. Then, compare them to the closest corresponding job classifications in your industry and region before communicating any planned wages or duty changes to the affected staff members.

There are several means to determine whether your wage structure is sufficient, over the top, or right on target with similar companies or organizations in your economic region. It also helps to know the signals that indicate your wage structure is not up to snuff. They can literally be right under your nose without you ever recognizing them.

Update Job Descriptions

A supervisor cannot accurately determine a fair wage until he or she can reference an employee’s current duties—in essence, the staff member’s job description. For most HR departments, job descriptions are practically done by rote—a necessary routine that accompanies performance evaluations. However, updating them on a timeline is another matter entirely. Other tasks and priorities too often get in the way.

If your company requires an annual or semi-annual routine of evaluating performances and updating job descriptions, the first step to assessing wages and comparing them to your company sector’s standard is done. You can expedite this initial step by first sending a missive and e-form for each employee to complete regarding their perception of their duties. Compare it to your HR files on the employee to gain a comprehensive idea of the duties assigned to the employee at the time of hiring. Better yet, send a copy of that file to the employee, along with the missive and other form. Your staff member can then reference it and provide a full account of his or her duties in one fell swoop. This saves time for HR or the supervisor.

How to Tell if Your Wages are in Line

Plenty of resources exist to determine whether employees’ wages are in line with your industry’s standards. According to the California HR Council for the Nonprofit Sector (HR Council), external surveys by employment-related agencies, job boards, and non-profit economic research groups are an effective means of learning what the standard salary is for particular job classifications. An HR department or supervisor usually references the salary scale midpoint, as determined by these resources, to see if an employee’s salary in is line with their sector or region’s standard.

The U.S. Department of Labor Statistics surveys job classification wages for each state. For instance, in the state of Michigan, the U.S. Department of Labor Statistics identifies the major occupation groups and links to those same groups in other states. Michigan employers can then assess wage or salary standards with other Upper Midwestern states.

An effective way of finding easy access to industry and regional wage standards is to participate in these agencies’ or organizations’ salary surveys. This gives you immediate access to information from said resources that will allow you to benchmark your organization’s compensation practices.

Don’t Ignore Your Turnover

Do you often employ contractors? Are they leaving early at a precipitous rate? This is one of those overt signs that something may be awry with your pay scale, as it relates to job duty or classification. A contractor can play the job market with a little more agility than an employee who is staying on to reap health benefits and other perks, despite their salary.

As for permanent employees, you can heap all the praise and extra, complimentary responsibilities in the world upon them to displace a good, old-fashioned pay raise. But, if you find some of your employees, especially in the upper classifications, leaving within a year or two, you should review your pay scale. The sooner you do, the quicker you can abate any word-of-mouth effect in your industry sector that can dissuade good candidates from applying to join your team.



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February 21, 2019




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