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 2016. 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).