One of the calls I receive often is from both individuals and companies on where the starting compensation should be for a new hire joining a company for the first time.
Currently with the unemployment rate so high, opportunities few and margins in our industry tight there has been little consistency in wages for specific positions like there was in the past. Employers need to be aware that there are regulations in place outlining minimum wages for not only unskilled minimum wage employees, but in other instances like management vs. non-management roles.
Visit http://www.dol.gov/dol/topic/wages/index.htm for additional education including reading up on the sub topics of wages as it relates to:
Educational Level & Pay
Recordkeeping & Reporting
Many small businesses do not have a set compensation schedule or may not have a written benefits plan or even offer any benefits. How then do you as an individual and as a company determine what is fair wages for a fair days work?
Let’s compare: both jobs pay:
$52,000/year salary or $25/hour (no overtime)
Scenario #1 (Field Supervision): Work week is 50 hours a week. Commute to projects are minimum 30 miles one way. Company offers individual paid health insurance and standard IRS rate for business travel, employee must provide own vehicle and insurance
Scenario #2 (Field Supervision): Work week is 50 hours a week. Commute to projects are minimum 30 miles one way. No travel compensation and no benefits
From an individual prospective in both scenarios they are making $52,000 a year gross and most likely will accept the position regardless of the circumstances on additional benefits.
From an employer prospective whether they are employer #1 or employer #2 both are viable options and may be all the employer can offer at the time.
Let’s look at what both parties should consider before making a commitment to one another:
»Skillset and interest (passion of candidate for the position) – Pay is irrelevant if they can’t do the job or if they aren’t going to give you their best.
»In this case the vehicle they are driving from both case scenarios consider safety and upkeep. In scenario #2 they will need to be able afford between $120/month in gas for a fuel efficient vehicle to up to $250/month in gas for a 4 x 4 truck or SUV and the maintenance annually all out of their 52K a year.
»Health insurance costs – Can they afford to pay their own or are they able to go on a spouse’s plan. Do they need to add dependents out of their pay or are they someone that will not enroll in healthcare which could cause future issues if they get ill and have extreme out of pocket costs.
Individuals tend to get upset when you throw in another factor of past compensation history because they think it will prevent them from getting the job. That is not the case. Employers who know your past know what they need to consider future for you even if their current circumstances do not allow them to offer you a comparable package when starting with them.
What an individual considering a job need to focus on is the right job in a company culture and under leadership that works for them. Employers need to consider all factors and also consider if this person is passionate, qualified and compensated enough with this job to stay with the company. The cost of turning an employee over is a large sum.
So, how do you best determine fair wages for a fair days work? First determine the known factors, job details, company benefits, most you could afford to pay for the position out of the gate and then locate the right person. If all the facts are there and can be justified and the person is interested in you, the company and the job it will most likely be a good match.
Bottom line; Knowledge is power for both sides!
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