WageWatch Ibrief Blog


Archive for January, 2016


Before you get knee deep into the new year, take the opportunity to step back from the day to day duties, reflect on the year that just passed and begin the year with a fresh perspective. Taking some time to plan your compensation calendar in the year ahead can help you stay organized, stay on task and focus on what is critical. Hopefully you have kept notes on compensation issues that occurred in the prior year, such as salary range or hiring issues for certain jobs, maybe a department has restructured and jobs have changed that could require new job descriptions, exempt status review and may call for a complete department salary structure review.  These are things you will need to attend to as you review your salary structure for 2016.  Taking stock and making a list of the issues and problems from the prior year is a good place to start for your 2016 compensation calendar.

Review and develop a timeline for your annual processes such as the merit increases, performance reviews, minimum wage increases, bonus payments, annual surveys you participate in, and wage or salary structure reviews. To do this, begin with last year’s timeline and a review of the process to ensure that you don’t miss any important steps or improvements or changes that are needed for this year’s process.  Communicate the timeline and proposed changes to process partners such as Payroll or Accounting to ensure everyone agrees to the dates and has an opportunity to provide their input regarding the process.

Include data audits on your calendar or task list. Keeping your compensation house in order is important.  Items to include are: ensure all jobs have the correct exempt status, ensure exempt jobs are paid at or above the exempt minimum wage, review wages by state to ensure all are at or above the minimum wage, include tip minimums.  Ensure overtime is being calculated correctly for tip positions, for employees who work more than one job and when non-discretionary bonuses are paid.  Perform some quick equity analysis, look for salary outliers and ensure you can defend if audited.  You may find simple mis-codings or more serious problems.  Look for new hires with hire salaries above or below the starting rate or any other exceptions that may need to be addressed.  You may find positions that during the past year have consistently been hired at the higher end of the salary range.  This is a strong indication that a salary range adjustment will be needed and this can be added to your list of salary structure issues that will need reviewed.   If you were audited during the prior year and any issues were found, include those in your internal audit.  Also it’s a good idea to have a procedure in place in the event of an audit during the coming year.

Review your compensation policies to ensure they are up to date with current regulations and with any changes that may have been made to your salary structure, procedures or systems. Ensure that you have not missed any new regulations that may require updates and changes to your existing policies or procedures.

Set aside time on your compensation calendar to review salary survey data when it is published later this year and perform a thorough analysis of your salary structure to market. A thorough review should be done at least every other year and each year you should minimally be looking at any problem areas or issues that occurred during the prior year and address possible salary structure movements and/or equity issues.

We expect to see continued pressure put on salary budgets and merit increases in order to meet rising demand for talent. Our consultants can work with you to get the balance right on budgeted wage increases and their relationship with structure adjustments. When wage increases and adjustments are made, often other potential concerns are uncovered such as wage compression and paying out of range. WageWatch consultants are here to offer comprehensive guidance on your salary structure maintenance and adjustment requirements.

WageWatch salary surveys provide data tools and report statistics for analysts of all experience levels. Please contact WageWatch if you need assistance with interpretation the statistics reported, help building custom reports, or have a need for our wide range of consulting services. For more information on our services and surveys please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on January 26th, 2016 · Comments Off on YOUR 2016 COMPENSATION CALENDAR


Compensation plays a critical role in organizations’ ongoing and increasingly challenging efforts to attract, retain and motivate a talented workforce. Compensation design and management play a vital role in aligning employee behavior with business objectives. Human capital costs represent a significant part of most organizations’ cost bases and need to be spent as effectively as possible.  It is vital to understand the consequences pay decisions can have on your organization.

Salary structures are an important component of effective compensation programs and help ensure that pay levels for groups of jobs are competitive externally and equitable internally. A well-designed salary structure allows management to reward performance and skills development while controlling overall base salary cost with a salary range cap. Market pricing is the most common method companies use to design base salary structure ranges using external market data combined with a focus on internal pay equity.  The goal of market pricing is to keep the organization from:  1. underpaying, resulting in losing talent to competitors, or being unable to attract the talent it needs and  2. overpaying which wastes organizational resources and impedes desirable turnover.   The secret to effective market pricing is the ability to spot and adequately analyze and level the data anomalies and imperfections using both science and experience.

Some organizations elect to pay lower than market and offset lower than market wages with offers of ‘good’ benefits, meaningful work and stability. This practice can lead to employee disengagement. Ultimately, these organizations risk losing people.   Also, the organization will likely attract people who couldn’t get ‘better’ jobs with the higher pay.  One of the key determinants of job satisfaction or dissatisfaction is how employees feel their pay package compares to others.

Pay-for-performance programs are used to award employees for desired behaviors and outcomes and they take many forms, including cash bonuses, company stock and profit sharing. Pay-for-performance plans have a learning curve, and they require regular maintenance in order to be and remain effective.   Incentive compensation plans need to align with the company’s business strategy, mission, goals, and objectives.  They should address root causes of performance and the goals must reflect a balance of financial results and the key business drivers.  Payout opportunities should be both consistent with the performance value and meaningful to employees.

While pay-for-performance plans provide financial incentive to employees, there can be disadvantages.   If not crafted carefully, they can cause employees to focus more on quantity over quality.  They may impede teamwork if workers view helping another employee as wasting valuable time that could be spent on reaching their own goals.  And just like base pay, incentive pay should be competitive with the market or it could fall short of motivating the employees.

Smart, successful organizations do regular planning and evaluating of their compensation and performance rewards systems. Compensation is visible and important to employees.  It is critical to have a solid and competitive pay strategy where pay decisions and policies match the objectives of the organization.  At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data 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 consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on January 20th, 2016 · Comments Off on LINKING PAY PRACTICES WITH BUSINESS OBJECTIVES


From regulatory rule changes to keeping pace with marketplace competition, here are a few items that are looming on the Human Resource Horizon in 2016:

FLSA Overtime Changes – The final rules were expected to be announced early 2016, but due to the overwhelming 270,000 comments received, it is likely the announcement and the effective date will be delayed until summer. What we do know for certain about the final rules:

  • The current minimum salary threshold a worker must hit to be overtime-exempt is $23,660. The proposed rules seek an increase to $50,440. And while it may not climb quite that high, it will climb.
  • The salary threshold will be tied to an automatic-escalator, so it can keep pace with inflation.
  • The DOL is considering making changes to the duties tests. The DOL specifically asked for comments regarding on whether the current duties tests are working to screen out employees who are not bona fide white collar exempt employees.

Human Resource professionals continuing to explore and utilize analytics to gain data-driven insights on human resource initiatives and challenges such as recruiting and retaining employees, compensation, merit increases, performance and motivation incentives as well as changes such as minimum wage increases, and the rising costs of healthcare.

Employee engagement continues to be a priority as it is linked to productivity, profitability and customer engagement. Engaged employees can foster innovation, and drive growth and revenue needed to thrive.

Succession planning and next generation leadership development will be critical with more than 3.6 million baby boomers set to retire next year while millennials are expected to account for nearly half of the global workforce by 2020. With so many millennials entering the workforce as well as taking over management positions, companies are forced to look at changes that millennial employees are demanding.  For example, millennials want regular feedback, instead of annual performance reviews, and virtual learning instead of printed manuals. This new generation will lead with transition, possibly flattening corporate hierarchies, empowering others and forcing companies to make a positive impact on society.

With the rise of telecommuting, co-working spaces, globalization and new technology tools, workers are demanding flexibility. It is expected that nearly every company will have a flexible work arrangements policy in the next few years.

Obamacare is adding new financial burdens as well as data tracking and reporting complexities to companies. In 2016, Obamacare penalties will go into full effect. For individuals who don’t have health insurance, they will be fined $695, up from the $95 penalty in 2014. Next year, 95% of companies with 100 or more employees will need to be insured, and companies with 50 to 99 employees will have to insure full-time workers. This could lead companies to lay off workers to save money, which puts more pressure on current workers to do more with a smaller headcount. It also adds more work for the HR benefits department. For employers with 50 or more full-time employees or full-time equivalent employees, the Affordable Care Act has transformed what was once an annual enrollment event into a monthly process of tracking and reporting extensive data from multiple systems.  To avoid costly penalties it will be become more important for businesses to consider an integrated human capital management solution.

An HR issue we’re hearing more about during the 2016 presidential campaigns is paid family leave. Providing paid leave for new parents or when an employee needs to care for a sick family member is not a new concept.  Several states have implemented some type of paid family leave benefit, and paid medical leave is being pushed by worker groups who do not want sick workers to come to the workplace while they may be both contagious and less productive.

Other areas in the regulatory realm that employers will be talking about in 2016 include possible changes to regulations regarding contract or contingent workers. The recession has led more companies to increase their percentage of contingent workers. This will definitely increase the pressure for further regulation amongst this job segment.

WageWatch offers accurate, up-to-date HR metrics, 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. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on January 13th, 2016 · Comments Off on 2016 HUMAN RESOURCE HORIZON


The New Year has already sprung, and it looks like 2016 will be another record employment year for leisure and hospitality industries. The Accommodations Sector of the BLS reports 20 straight months of record employment levels for hotels across the country. The Food Services Sector has had 54 straight months of record employment growth. Finally, the Healthcare and Social Assistance sector employment has grown every month this century increasing from 12.7 million employees in January 2000 to over 18.8 million as of November 2015.

What we at WageWatch have been watching and speaking with our lodging and healthcare customers about for the past year are the increasing competition for employees at all levels of the service industries. We have identified 22 job positions that hotel management companies and healthcare systems are in direct competition for hiring employees. We will be adding these crossover jobs to our wage surveys this year so that the two industries will be able to compare wages for these 22 job positions. This should be a great help to HR Managers around te4h country.

This week, we will also be surveying the gaming and lodging sectors for their budgeted wage increases for 2016. Our Forecast of Wages for 2016 reports will issued the end of January. Our survey last January for 2015 budgeted wage increases resulted in a forecast of 3.4% on average for hotels and slightly less for gaming properties.  Based on our PeerMark™ wage survey of over 5,100 properties last year, our forecast was accurate.

We anticipate that by the middle of this year that the Department of Labor will issue its new rules on overtime. Nationally, it is estimated that over 5,000,000 middle level managers across all industries who are now exempt under the EAP (or so-called “white collar” exemption), but would fall under the proposed 40th percentile of earnings for full-time salaried workers ($50,440 in 2016 dollars). WageWatch analyzed the impact on the lodging sector last July and estimated 190,000 exempt salaried employees would be affected by the rule change.

Finally, with the record employment and added pressure on wages and salaries this year, Wagewatch should another very busy year assisting its customers with their wage and salary analytics. In 2015 the WageWatch Consulting Team successfully completed numerous compensation and human resource projects for many of our Hotel Industry Customers.  Our consulting assignments included individual hotels and resorts, large national independent hotel companies as well as large hotel brand management companies. We assisted clients with benchmarking for their hotels, creating salary ranges and salary programs for both hourly and management employees. We also partnered with clients this year to manage projects working with their hotel human resource representatives on the proper execution of their wage policies.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives and that your pay practices are fair, equitable and non-discriminatory. We can provide your business with compensation surveys and salary reports to help you establish a budget for your merit pay program, including bonuses and incentives. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about our compensation surveys, salary reports and other services, please call 480-237-6130 or contact us online.