Market Pricing – Knowledge Pay Website

Market Pricing – Compensation Group Hits 1500 Members

Posted on April 22, 2014 by Chris Kelley Posted in Market Pricing, Salary Surveys

Several years ago, I started a Group out on LinkedIn called “Market Pricing – Compensation”. This community has now reached a milestone of having over 1,500 members….it’s now at 1,575 and growing every day!

The group is made up of compensation and HR professionals from around the world who all share a common interest of trying to make sure they have the best salary survey sources to fit their relevant labor market. I personally review the profile of everyone that requests membership to make sure the group stays on focus.

Can Paying Higher Wages be Smart Business?

Posted on April 9, 2014 by Chris Kelley Posted in Compensation Consulting, KnowledgePay, Market Pricing

Many employers follow the formula of reducing overhead and employee wages as their way to increase profit. Given that pay related expenses for any business can be the single largest operating expense, it’s easy to see how minimizing wage expense can lead to higher profits. However, some organizations are realizing that this might not be the best way to optimize profits. The pay check your employees take home is one of the most powerful communications vehicles you have at your disposal and the key message it shows is how much (or how little) you value them. Some business gurus believe that sense of value translates directly into how much effort your employees give on the job and can lead to dissatisfaction and attrition of employees, which leads to higher costs in other areas. This also has a negative impact on customers and top-line revenue. The jury is out though. Would paying higher wages positively impact your business?

Many big name companies see the writing on the wall and are changing philosophies. For instance, Gap, Inc. recently raised the minimum hourly wage for their employees to $9 with plans to increase to $10 an hour in 2015. According to Glenn K. Murphy, Gap’s Chief Executive, increasing wages is an investment in Gap’s employees which will bring many returns to the company. He said, “. . .To attract and retain the best talent we have to make sure we invest in them.”

QuikTrip convenience stores has proven paying higher wages can increase profits. QuikTrip values their employees. They offer employees a “regular wage, a customer service bonus, a profit bonus and even an attendance bonus” according to one manager. QuikTrip’s philosophy is that if they treat their employees well, the employees will treat customers well. The customers will then be more loyal to the company.

Market Pricing Hybrid Jobs

Posted on March 25, 2014 by Chris Kelley Posted in Market Pricing, Salary Surveys

Comparing Apples & Oranges in Compensation

One of the biggest market pricing challenges we face in compensation is what to do with those pesky hybrid jobs. What are hybrid jobs? As defined on page 35 of The Ultimate Market Pricing Glossary,

Organizations are forced to restructure, de-layer, take out costs, etc., and as a result, end up combining jobs that used to be done by two or more people and dump the work onto just one person. The resulting job is a hybrid of two or more traditional jobs that each may have been benchmark jobs.

A hybrid job is a challenge to market price because of its potpourri of job duties and how it compares (or doesn’t) to the classic benchmark jobs from our salary survey library.

The first hurdle to overcome may seem pretty basic, but we first have to let go of the notion that you are going to find a salary survey that will have that unusual job you created during your last reorganization efforts. Salary surveys are going to have benchmark jobs that other companies in your market are likely to have. Not these one-offs.

So what’s a comp pro to do? Well, there are a few techniques that you could consider and the trick will be to figure out what is most appropriate fit with your compensation philosophy and the objectives of your market pricing efforts. A compensation philosophy that recognizes a balanced approach to ensuring internal equity along with external competitiveness can lead to a different result when compared to a firm whose philosophy is heavily weighted toward external competiveness.

Market Pricing Social Media Jobs (Really, Any Emerging Job Family)

Posted on September 13, 2011 by Chris Kelley Posted in KnowledgePay, Market Pricing, Salary Surveys

Ann Bares recently posted a blog on market pricing social media jobs. She really hit the nail on the head by using a very timely and relevant example many of us in the compensation profession are wrestling with right now. Today it is social media jobs, a few years ago it was web development, and tomorrow it will be some other emerging field. We need practical guidance for market pricing emerging job families

I don’t disagree with Ann’s advice at all, but rather wanted to add some additional perspective.

Understand the Labor Market: Know where people come from and/or go to when trying to fill those emerging job families. The social media job family that Ann has queued up is a fantastic example because five years ago, these jobs didn’t even exist. Think about it…no kid was playing in the sandbox twenty years ago saying, “When I grow up, I want to be a Community Moderator.” Yet today, there are thousands of people making a living by doing just that.

So, where did they come from?

Clearly, there’s no single answer, but when I look at the survey job summaries, the Monster job postings or the LinkedIn profiles of people doing this type of work, I see threads of both journalism and marketing. This prompts me to study the market data for those job families as well. Granted, this is not your typical “70% of job duties” type of job match for the social media jobs, but it does provide some insight on the wages paid to people in a nearby talent pool. If the tasks and qualifications are reasonably similar, the market data for these adjacent, but more established, job families will tend to track with the emerging field.

Salary Planning Surveys…and a Grain of Salt

Posted on August 23, 2011 by Chris Kelley Posted in Compensation Planning, KnowledgePay, Market Pricing, Salary Surveys

It’s that time of year when salary planning surveys get published and compensation professionals all over the world look for guidance about how much to age their market data and build their compensation budgets for the upcoming year. There are several sources of salary planning survey data that get used year in and year out.

The most prolific is the WorldatWork…which has been used be virtually every company where I’ve worked or consulted. But there are also many other sources that compensation professionals turn to, such as AonHewitt, Mercer, HayGroup, Towers Watson, etc. Which ones are going to be right for any one company is really going to depend on their labor market and which salary survey vendor has the best representation within that labor market.