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Archive for July, 2013

How to Avoid Antitrust Claims When Conducting Wage Surveys: Part 2

As stated in our previous post, we will now cover the proper steps to take in order to minimize risk when deciding to share wage and benefit information with a competitor. The safest course of action for human resource directors to follow is to not discuss wage and benefit information with competitors except in controlled and limited situations. The following is a summary of the steps that WageWatch recommends to minimize your risk if you intend to share data:

  • Employers should act unilaterally about setting wages and benefits.  There      should not be an agreement or understanding, written or oral, with respect      to fixing, maintaining or stabilizing wages and benefits.
  • The wage and benefit information should not be exchanged directly between employers.  This means no phone calls or round tables where      information is exchanged.
  • A third party should be utilized in order to make sure that no employer has      direct access to each other’s data. Participation in a WageWatch      compensation survey can be part of a defense against accusations of      antitrust violations. The WageWatch Hospitality Industry Competitive      Market Survey complies with all DOJ safe harbor guidelines.
  • The information that is disseminated by the third party should be      aggregated.  The ranges or averages of the wages and benefits cannot be disseminated if it can be related to a particular organization or a specific job.  This eliminates the once prevalent practice of tabulating the data for each employer in a spreadsheet format even if the name of the particular employer associated with that data was excluded.
  • Each aggregated wage or benefit statistic disseminated should be a composite of at least five different employers.
  • The disseminated statistics must be “historical”.  This means the older      the better.  The aggregated information disseminated to participants should not reflect current or prospective wages and benefits.  Current is defined as wages or benefits that having been in effect for less than three months.

While the above is an overview of steps to be taken when considering exchanging wage and benefit information between hotels, consultation with your legal counsel is recommended before participating in any exchange of wage and benefit information with competitors.

WageWatch provides expert services across multiple industries and geographic markets with cost-effective online compensation and salary surveys. We are an innovative organization that is always on the lookout for new ways to collect compensation and salary data for surveys and wage reports, allowing us to expand continuously into new industries and markets.

Please call us today at 480-237-6130 or contact us online to learn more about our services.

Posted in Uncategorized on July 22nd, 2013 · Comments Off on How to Avoid Antitrust Claims When Conducting Wage Surveys: Part 2

How to Avoid Antitrust Claims When Conducting Wage Surveys: Part 1

Hotel human resource professionals frequently participate in professional associations, industry groups and other organizations formed to facilitate information sharing and networking.  Few are aware that such activity, if it involves the sharing of cost-related information such as employee wages and benefits, could give rise to violations of antitrust law or be used as evidence of such violations.

There have been a number of antitrust cases brought by plaintiffs in different industries regarding the exchange of wage and benefit information between competitive employers. Probably the two most noted cases are United States v. Utah Society for Healthcare Human Resources Administration (1994) and Todd v. Exxon Corp. (2001). While these cases dealt with specific industries, most attorneys practicing in the area of labor relations and antitrust look to these cases for guidance regardless of the industry.

The Federal Trade Commission and the Department of Justice have issued a statement setting forth an antitrust “safety zone” for health care providers who participate in written surveys.   They will not be considered to be in violation of antitrust laws if the following conditions are satisfied:

– The survey is managed by a third party;

– The information provided by survey participants is based on data more than three months old; and

– There are at least five providers reporting data upon which a disseminated statistic is based, no individual provider’s data represents more than 25% on a weighted basis of that statistic and any information disseminated is sufficiently aggregated so that it does not allow recipients to identify the compensation paid by any particular provider.

This statement gives guidance specifically to the health care industry.  To date, there is not such a case that has been brought in the hotel industry. Although, with the recent surge of labor organization activity going on across the country, our industry should continue to be cautious with regard to how wage and benefit information is shared with competitors.

In our next post, we will discuss precautions to minimize risk if you intend to share wage and benefit information with a competitor.

As a company, it is important to utilize benefits survey data, compensation surveys and salary reports. Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team.  WageWatch surveys over 5,000 hotels, resorts and casino properties in the United States and the Caribbean.  WageWatch’s proprietary survey process enables human resources professionals to access the most up-to-date and accurate wage and benefits data and prepare custom reports based on their needs and requirements. Additionally the WageWatch Compensation Consulting Team is available to assist you with all of your compensation needs such as pay structure design and implementation, market competitive analysis, internal equity audits to address employer concerns and add creditability to pay practices and much more. For more information, please contact WageWatch at 480-237-6130 or contact us online.

Posted in Uncategorized on July 18th, 2013 · Comments Off on How to Avoid Antitrust Claims When Conducting Wage Surveys: Part 1

Salary Surveys 101

Understanding the fundamentals of salary surveys is an important part of managing compensation at your organization.  Salary surveys are your primary and best source for setting pay rates.  Paying your employees fairly and competitively is good business.  Paying below the market can lead to employee turnover and paying above the market can negatively impact revenue.  Companies pay for salary survey compensation data because the benefits far exceed the cost as it is a fraction of a percent compared to total payroll cost.  Additionally utilizing third party survey vendors such as WageWatch, that comply with all DOJ safe harbor guidelines can protect your organization from anti-trust violations.

Select the right survey for your organization.  The wrong survey source can lead to higher or lower data, so always look at the participant list and demographics and other measures of relevance to your industry such as revenue, size and business segment.  While government data can be a reliable resource for salary benchmarking, the data is often found to be conservative when compared to other compensation data sources due to the time frame it is captured, and the types of organizations surveyed.  Salary data found for free on the internet is not only indefensible but since sources cannot be verified, the data is found to be highly inaccurate. These sources generally do not publish participant names, demographics, effective dates of data, and sample sizes.  Data published by recruiting firms and individual employee data (such as from job boards) also tend to be unreliable and report inflated pay rates.

Understanding your market and knowing where you lose employees to and where you recruit from is key to selecting the best competitive set for your organization.  For example, your hourly staff may be recruited from local competitors while your management staff may be recruited from all over the U.S.  The best salary data will be from companies with similar geographic focus.  When your recruiting pool is local, ideally your salary comparisons will come from other organizations in the same city or town. However if the data is unavailable, good salary comparisons can come from a different city or town with similar labor market characteristics and a similar cost of living.  When salary survey data is unavailable for a local market, compensation professionals will often use regional or national cuts of data and apply the cost of wage factor for the specific locality to those results.  This is a common practice among compensation professionals and the data results are relevant and reliable.

Another critical factor is sample size.  To remain anti-trust compliant, there must be at least 5 companies matching to a position to yield any results.  And generally eight to ten participating companies is considered a good sample size for positions below the management level.   Ideally the sample size should increase the more senior the positions being surveyed, since each company organization structure will differ.

Take the time to read the defined terms provided by the survey to ensure a correct understanding.  This is important both for reporting your data and correctly interpreting the survey results.  Read the survey job descriptions and ensure you have an accurate understanding of your organizations’ jobs, so that you correctly match to the survey jobs.  Never match solely by title. A survey job description will normally list the primary job function in a couple sentences, followed by key responsibilities. The descriptions are generic but should contain enough information for participants to appropriately match.  It is also important to match the organizational level of the positions be surveyed.   For example a Rooms Manager may be the number two position at one organization and may be the top Rooms executive at another and this would clearly not be a match.

To correctly interpret the survey data results, pay attention to exempt status, if the pay is reported as hourly or annual etc., union/non-union status and the effective date of the data.  Decide whether aging the data is appropriate based on the effective date of the data and the average percent increase that is anticipated.  Along with the actual pay data, surveys often include salary range information.  You should include the salary range information in your analysis of results.

As for the data statistics, the median pay is widely considered to be ‘at market’.  The range of pay reported differs for various reasons such as pay philosophy; incumbent’s length of service or proficiency in the job.  Looking at your organization’s current pay point for a position as compared to the survey pay median along with the range of pay reported in percentiles as well as the salary range (minimum, mid-point and maximum) data will help you make an educated decision regarding where to set your pay structure.  Also ensure that you look at incentive/bonus and other forms of compensation that are reported in the survey and include this in your analysis.

Taking the time to understand the survey jobs, data fields and results will go a long way in helping you set competitive and appropriate pay levels for your organization and positions.  Today’s world moves fast, and as an employer you should constantly be monitoring and adjusting your business operations to meet the ever changing wants and needs of your employees. At WageWatch, we offer accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including market compensation data, benefit survey data and salary reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on July 10th, 2013 · Comments Off on Salary Surveys 101

How to Benchmark Hybrid Jobs

The traditional procedure for market pricing a job title begins by accurately matching your company’s job to the survey’s benchmarked job. To aid in this effort, WageWatch collects employee payroll data on 843 distinct job titles across all surveys for 2013. Each job title in the survey is provided with a job summary detailing the major functions of the role. Trying to match by exact job title alone can lead to inaccurate market pricing. The entire job summary should be analyzed to determine best fit, especially when using a compensation provider for the first time.

Even with 843 job titles surveyed, there are occasions where an exact market match cannot be made. There are several reasons for this. One common reason is this job performs a hybrid function. The economic downturn caused traditionally single function jobs to merge or collapse into multifunction positions. We also see hybrid jobs in small businesses and in business units experiencing changes in technology or services. Healthcare might need a job that requires both a technology and clinical expertise, or in hospitality, a job that conducts both sales and operations duties.

The rule of thumb WageWatch recommends is that if your company’s job function matches our benchmarked job title by at least 80%, then that’s is a suitable market match since the primary function of the job is the same. Another way to think of the 80% guideline is 4 out of 5 days of the week they are doing the same job. The 20% of the job that is not an exact match falls into the ubiquitous “other duties as assigned” category on the job description.

An example of a hybrid function is a hotel employee who supervises both the front desk and the maintenance teams. This job performs a split 50/50 role and cannot be accurately matched to either a Front Desk Manager or Maintenance Manger alone. This is where hybrid job pricing requires an additional calculation beyond the one-for-one market match.

To build upon the example, let’s say you have calculated that from your competitive set the market average rate of pay for Front Desk Manager is $18.00 and $22.00 for Maintenance Manager respectively. By weighing each rate by the amount of time spent in the function, you can calculate a hybrid market average rate of $20.00 for this job.

In another example, a healthcare clinic needs to market price a role that performs Registered Nurse duties (40%) and Database Administrator duties (60%) in a patient data management role.  The WageWatch PeerMark report for the custom competitive set shows RN market average is $38.00/hr and Data Admin at $45.00/hr. The calculation for determining the hybrid market rate is as follows:

($38.00 x .40) + ($45.00 x .60) = $42.20

This hybrid pricing method works best when combing two market benchmarks. If you need to use three or more, we recommend you use an internal pricing strategy for this niche role. For assistance with hybrid job pricing, job matching, and market pricing please contact the WageWatch Consulting Team.

At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys and salary reports to ensure that payment and benefits plans are on par with those in the industry. For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online (https://www.wagewatch.com/Contact/ContactUs.aspx).