Drill Down Deeper
If you are creating compensation plans in the coming months, make sure you use the right data, advises Katie Bardaro, PayScale's lead economist. Looking at the wider economy, you hear news of sluggish hiring and persistent unemployment. If you just used that information, you could assume that the competition for talent is relatively light. For some companies that may be the case, but to make the best compensation decisions for you company, you need to drill deeper, according to Bardaro. The PayScale Index, which was recently updated, provides detailed data on the U.S. salary growth rate across the entire economy, but also at the metro, industry and job category level. Below are some of the details it reveals.
Hot in Houston and Seattle
A number of cities remain in the economic doldrums, but others are booming. Take Houston, which has seen year-over-year wage growth of at least two percent since Q2 2011 or Seattle, which has seen positive wage movement each quarter since Q3 2010. Understanding the wage conditions in the cities from which you draw your recruits must be part of your compensation planning, Bardaro argues.
Are Wages in Your Industry Skyrocketing or Plummeting?
Considering the city alone is not sufficient, proper compensation planning will take into account the pay trends in your industry, according to Bardaro. While some industries are still struggling to emerge from the downturn, others are seeing wages skyrocket. No doubt contributing to Houston's growth, the mining, oil & gas exploration industry saw some of the best salary growth, with wages increasing over five percent from Q2 2011 to Q2 2012. Understanding what is happening in your industry is vital if you are to be successful in recruiting.
Transportation Wages Are Growing – What’s Happening in Your Job Categories?
Another essential piece of information is the wage growth of the job categories you employ in your business. Transportation jobs lead overall year-over-year growth with a nearly four percent increase in wages. Looking at the longer term, this salary growth rate is part of a process of recovery from a series of wage declines in 2009 and 2010, according to Bardaro. Companies that base their compensation planning on those leaner years could be seriously challenged by employee retention.
While some job categories have shown impressive pay increase trends in 2012, others show a less dramatic, but persistent pattern of growth. Health care, for example, grew just over one percent year-over-year in the second quarter, but leads all industries in growth since 2006.
Don't Be Afraid to Ask for Help
Synthesizing metro, industry and job category data together can greatly boost recruiting and retention efforts. That said, integrating multiple sets of data into your compensation calculation is not easy. You need to understand how to weigh each input and how to decide which data to include and which to exclude. PayScale’s software can make it easy to drill down deeper, or talk to your compensation consultant to find out how to use the data. You will reap the rewards as you retain and recruit the talent you need.
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