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Posts Tagged “2013 Wage Forecast”

COMPENSABLE TIME

Employers need to ensure they count all worked hours as paid hours for their non-exempt staff. For example, when an employee eats lunch at their workstation or desk and their lunch is interrupted by work such as answering phones or email, the employee is working and must be paid for that time because the employee has not been completely relieved from duty.

If the employer has a policy that is expressly and clearly communicated to the employee regarding a specific length of time for a break, any unauthorized extensions of that break time do not need to be counted as hours worked. Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. However, the employee must be completely relieved from duty for the purpose of eating regular meals.

The federal Fair Labor Standards Act (FLSA), doesn’t require employers to provide meal or rest breaks, though some states do require such breaks and the rules can also be different for younger workers. You can find a list of state meal and rest break laws at the Department of Labor’s website at http://www.dol.gov/whd/state/meal.htm and http://www.dol.gov/whd/state/rest.htm.

Employers that fall under the federal guidelines do not have to pay for meal or rest breaks unless:
• The employee works through or during their break
• The break lasts 20 minutes or less
• The break is interrupted by work

Some other compensable time under the federal rules can include waiting time, on-call time, attendance at meetings and training programs, travel time and performing work outside of work hours such as checking emails.

Waiting time may or may not be hours worked depending on the circumstances. If an employee needs to wait before a duty can start such as a firefighter waiting for an alarm, then the employee is ‘engaged to wait’ and this time is worked time and must be paid.

On-Call Time is paid time if the employee is required to remain on the employer’s premises. In most cases, the on-call time does not have to be paid when an employee is not required to remain on the employer’s premises. However additional requirements put on the on-call time that further limits the employee’s freedom could require the time to be compensated.

Attendance at meetings or training programs is paid time when any of the following conditions are true:
• It is during normal work hours
• It is mandatory (if the employee feels that they should or need to attend, then it is mandatory)
• It is job-related

Travel time may be paid time or not depending upon the kind of travel involved. Regular commute time to and from the work site is not paid time. When the employee works at a different work site location then any commute time that is greater than the employee’s regular commute time to their usual work site needs to be counted as paid time. Travel that is part of the regular work duties, such as travel from job site to job site during the workday, is work time and must be counted as hours worked. Overnight travel is work time and must be paid time.

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.

An Introduction to Skill Based Pay

Skill based pay sometimes referred to as ‘person based pay’ is a system that places a monetary value on skills rather than the job. Business owners must always be thinking about what’s next and continuously strive to improve in a rapid changing marketplace with increasing customer demands and both global and domestic competitors. Growing in popularity is a move from traditional seniority and merit based pay to skill based pay systems which communicate to employees that financial rewards are directly related to the knowledge and skill they can bring to the workplace.

Skill based pay allows companies to review market compensation data and determine pay based on the assessed value an employee has within an organization. Rather than establishing a set salary for every job description, the employee’s skills and knowledge are taken into account.

The following are a few advantages of implementing a skill based pay system:

• Encourages the development of skills, which increases the value of a company

• Increases flexibility of skills among employees

• Rise in organizational performance levels, such as productivity and quality

• Higher employee satisfaction

When a company makes the decision to use skill based pay, they must evaluate market compensation data and evaluate three types of criteria: horizontal, depth and vertical skills. The horizontal and depth categories are those skills of a more technical nature while vertical focuses on organizational skills. A skill matrix is then designed, allowing for movement within the matrix as skill levels increase. Compensation surveys are reviewed to set the pay range for each level along the matrix. Companies need to decide how to evaluate the skills of their employees to place them within the matrix and determine on-going training needs to support the structure. Skill certifications are a way to clearly and objectively measure the skillset of each employee.

If you are interested in moving your company to a skill based pay system, consider the services of the professionals at WageWatch, specializing in innovative market compensation research. We offer compensation surveys for a variety of industries and can provide you with an accurate 2013 wage forecast. Please call WageWatch at 888-330-9243 or contact us online for more information on market compensation and compensation surveys.

The Pros and Cons of Merit Pay

Merit pay is a compensation strategy that is used to motivate employees with pay increases for positive performance outcomes. This system is one that is heavily debated among businesses throughout a wide variety of industries. Every business has its own unique structure and culture, and must decide what payment system works best for them based on a set budget developed from salary reports. If you are thinking about establishing a merit pay system for your company, it is important to understand both the pros and the cons:

Pros

– Statistically, merit pay is one of the most effective methods for motivating employees to perform at their peak, which allows them to achieve high levels of productivity.

– This pay system promotes healthy competition among employees, encouraging each to work hard to achieve their very best while also delivering great results for the company. Employees enjoy being recognized among their co-workers and upper management for a job well done.

– The brightest and most skilled employees can easily become unmotivated. With a merit pay system, however, motivation is achieved. High performers are well aware of their skills and enjoy using them in challenges to achieve goals that are linked to monetary incentives. Merit pay gives these employees the recognition and reward they deserve and also helps companies to retain their best employees.

Cons

– Merit pay systems can cause conflict among employees. Some may feel that the system is unfair because no matter how hard they work, they may not be able to earn any incentives. This leads employees to feel unmotivated and unimportant. This is primarily due to inadequate performance appraisal systems leading to inconsistencies among raters.  And the performance appraisal ratings are the basis for the merit pay.

– Merit pay systems can garner healthy competition, but they also may lead to the disintegration of team unity. If everyone is in it for themselves, problems could arise. Personal goals may become more important than team goals, which is not beneficial for the company as a whole. Top performers may also be seen as more valuable and important than others, leading to feelings of jealousy.

– It can be challenging in the current economy to adequately distribute merit pools of 2% or 3% and still award your top performers adequately

For the most part, merit pay is a method that is generally accepted and tends to work for most businesses. It is important, however, that you still weigh the pros and cons before carefully choosing a payment system that works the best for your business and its unique culture. All incentives should be those that will be meaningful to employees. As such, businesses must provide incentives that are competitive with compensation being provided to top performers at other companies. Salary reports can provide you with this data.

At WageWatch, our professionals 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.

 

WageWatch Wage and Employment Forecast for 2013

LODGING INDUSTRY 2013 WAGE FORECAST

The WageWatch 2013 survey of over 6,000 hotels nationwide in our database shows planned pay raises for hourly employees and non-exempt salaried employees averaging 2.8% with a median of 3.0% and a mode of 3.0%. The annual survey completed on January 7, 2013, further disclosed that hotels are planning on similar pay raises for their salaried exempt employees, with a mean of 3.0%, median of 3.0% and a mode of 3.0%. Randy Pullen, President and CEO of WageWatch stated, “For the lodging industry, 2013 will feel a lot like the 1993 movie Ground Hog Day starring Bill Murray, as WageWatch forecasts that pay raises for all sectors of the lodging industry will repeat raises experienced in 2012.”

If the planned wage increases for 2013 are further broken down between full service hotels and limited or focused service hotels, the survey discloses that full service hotels will, in general, have slightly higher pay increases.  Full service hotels participating in the 2013 survey disclosed an average planned pay raise of 2.9% for hourly employees, with a median and mode of 3.0%. Focused service hotels had a slightly lower average pay raise for hourly employees of 2.8% with a median and mode of 3.0%.  For salaried exempt employees, both full service and focused service hotels reported planned wage increases averaging 3.0% with a median and mode also of 3.0%.

Randy Pullen also stated, “While hotel companies are planning on pay raises of between 2.8% and 3.0% for 2013, it is likely that actual wage increases that will be reported later this year by WageWatch in its 2013 hotel wage survey will be two or three tenths of a percent less than the forecast.  We saw a similar trend last year where actual wage increases for the lodging industry as reported in our iBrief Blog of October 24, 2012 Industry 2012 entitled Wage Increases- Part 1, were lower than the forecast, coming in at 2.6%.”

LODGING INDUSTRY 2013 EMPLOYMENT FORECAST

This year will see continued employment growth in the Accommodations segment of the Leisure and Hospitality super sector as reported by the U.S. Bureau of Labor Statistics. The U.S. saw significant gains in employment for the Lodging Industry the first half of 2012 as indicated in the following table:

 

WageWatch had forecast employment growth seasonally adjusted on average of 25,000 jobs in 2012 vs. 2011.  As the year progressed, hoteliers became more conservative and did not hire as many seasonal workers during the summer months, which pulled down the average for the year.  WageWatch attributes the pullback directly to the political uncertainty of the election year and the looming fiscal cliff impasse at yearend. This conclusion is based on the continued strong economic recovery that the industry experienced in 2012, which should have translated into more employment gains.

Our forecast for last year of a 25,000 increase in employment was based in part on the PKF Hospitality Research, LLC’s national econometric forecast of the U.S. Lodging markets for 2012.  Actual performance for 2012 was better than forecast by PKF, with 61.5% occupancy, a 1.6% increase over 2011 yearend 59.9%.  Actual Average Daily Rates came in slightly lower than forecast. Overall, RevPAR increased by 6.8%.  Net operating income was forecast to increase by 12% for 2011 over 2010, a strong performance on the back of an 18% increase for 2010 over 2009. This level of growth in the lodging industry should have supported an increase of 25,000 jobs in 2012.

Looking ahead to 2013, most leading economists are forecasting continued slow but steady growth of the U.S. economy in the range of 2.0% or better. Expectations are for slow growth the first part of 2013 with stronger economic growth the second half of the year. This should result in continued growth for the lodging industry. Smith Travel Research is forecasting an increase in occupancy of 0.3% and an Average Daily Rate increase of $4.86 for the lodging industry, with RevPAR increasing by 4.9% for 2013.  PKF Hospitality Research is slightly more optimistic with a RevPAR increase of 6.0% for 2013. Overall, the improving Average Daily Rate and occupancy numbers for the lodging industry will lead to stronger income statements for hotels, with net operating income growing by double digits in 2013.

Based on continued economic growth in the U.S. with the economy strengthening midyear and strong financial performance forecasts for the lodging industry for the year 2013, seasonal employment should increase significantly this summer with the Accommodations segment rebounding strongly, with employment growth of 20,000 jobs for the year. This will bring employment levels slightly above yearend 2008 levels, but still 50,000 jobs below the peak for yearend 2007.

 

Posted in Wage Forecast on January 9th, 2013 · Comments Off on WageWatch Wage and Employment Forecast for 2013

WageWatch Looks Ahead to 2013

 

The New Year began with our political leadership in Washington, DC finally reaching an agreement on a permanent tax cut for 98% of Americans.  No longer will it be known as the temporary Bush tax cuts. It was not pretty to watch, but it was instructive. It marks the first of many more compromises that will be made during the year to begin the process of reigning in deficit spending and stabilizing our Nation’s debt crisis.

What does this mean to the U.S. economy and to employment for 2013?  Essentially, it is good news. This should not be as a surprise for most of our readers, but it probably means more of what we experienced in 2012.  A slow growing economy with employers cautiously hiring for critical positions, while trying to understand how the Affordable Care Act (ACA), better known as Obama Care, will impact their costs and employee insurance plans.

Most economists agree with this scenario of slow growth with the possibility of the economy picking up speed later in the year if the private sector gains confidence in the future stability of the U.S. economy.  WageWatch will have more to say about the economy and the impact it will have on this year’s wage increases for the hotel and gaming industries when we publish our Employment Forecast 2013 next week. The forecast is based on our survey of over 4,000 properties late last month.

Looking at other trends for 2013, clearly, the ACA has garnered the most headlines during the year.  As we have previously reported, if you are a small business with 51 or more full time employees, you will be fined $2,000 per employee, excluding the first 30 employees, if you do not offer insurance for employees that work an average of 30 or more hours each week. For small businesses with 50 or fewer employees, there is no penalty. Small businesses of all sizes are also not required to provide insurance for part-time employees. We are already beginning to see examples of employers cutting back on the number of fulltime employees by reducing their hours. Also, look for small businesses with more than 50 employees to reduce their workforces or change the structure of their companies.

One bit of good news is the IRS ruled this past Monday that affordability does not extend to fulltime employees’ families. Under ACA, employers will have to offer insurance that is certified affordable only to employees. To be certifiable as affordable, the premium for each employee’s plan cannot exceed 9.5 percent of their total household income. If the insurance coverage doesn’t meet the affordability law, employees will be offered tax credits to purchase insurance on their own. Business owners will then have to pay whichever is less: $3,000 per employee that receives the credit or $2,000 per employee, excluding the first 30 workers.

Finally, WageWatch welcomes our newest employee, Debra Anundson, who joined us on January 1st as our new Manager of Compensation Analytics.  Debra was with Interstate Hotels & Resorts for 22+ years, where she served in many capacities in Compensation and Benefits at the corporate office, managing all facets of their compensation, health & welfare and retirement benefits.  She created salary structures for exempt and nonexempt positions in all divisions as well as the corporate headquarters.  You can read more about Debra in the press release.

WageWatch, Inc. is the leading compensation survey provider for the lodging and gaming industries with over 6,000 properties in our database participating in its PeerMark™ Wage survey. WageWatch also conducts compensation surveys the healthcare, staffing and non-profit industries. 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.

Not All Salary Surveys are Created Equal

With traditional annual salary surveys, the process of data collection starts when the survey opens. The opening is followed by a window of time that is typically two to four months, and sometimes as long as six months. This survey window depends on the industry and number of positions surveyed, for which survey participants would report their payroll data for incumbents. At the end of the collection period, the survey closes and no additional survey participation can occur until the following year when the survey cycle is completed and the survey reopens. The date the survey closes to participation is referred to as the survey’s effective date.

Once the survey closes, the wage data is manually cleaned, analyzed, and the findings formatted into a compensation benchmark report. Building the report in this manner can take an additional two to three months and for some compensation surveys up to six months. Once the report is complete, it is made available to participants and is on sale until next year’s compensation report is published.

The traditional annual compensation survey, by design, reports last year’s data. Compensation professionals know the value of using the most update-to-date market data available to conduct their benchmarking and wage analysis.  WageWatch has responded to this need with salary surveys and benefit surveys that collect and report the most current data – never last year’s data. HR directors and compensation managers know the effective date for each participant. This approach creates a survey platform that is dynamic, never closes, and reports the most current market data available.

WageWatch uses the next generation methodology based on a 365-day subscription period that allows participants to continually update data and report findings during the year. WageWatch defines the effective date as the date on which wages are internally updated in an organization’s payroll system. WageWatch’s survey platform is dynamic and not static as are traditional annual salary surveys. While Wagewatch does have a close date for its compensation surveys, which would normally be referred to as the effective date in a traditional survey, this is a soft close date.

Because our surveys are dynamic compensation surveys, we continue to accept participants’ wage data after the close date of the survey.  Users can subscribe after the soft close date, enter their data and create their own custom reports all in the same day.  WageWatch reports allow you to select an entire market to compare your in house salary data, or you can select as few as five competitors you select to compare your salary data. This report is known as the WageWatch PeerMark™ Survey report.

Posted in Survey Reports on December 5th, 2012 · Comments Off on Not All Salary Surveys are Created Equal

Employee Health Benefit Trends to Watch for in 2013

Employee health benefits will continue to be an important issue to both employers and employees in 2013. With the election behind us, employers are looking to the future and working to determine the impact that recent healthcare reform will have on their business. In 2013 businesses will work to establish a balance between working within the regulations of the Patient Protection and Affordable Care Act (PPACA) while attempting to keep the costs of employee health benefits down.

Even with the rising costs of healthcare, many employers remain committed to providing their employees with attractive and comprehensive healthcare benefits. After reviewing benefits survey data, along with the healthcare coverage trends of 2012, the following predictions can be made for 2013:

Rising Costs

As healthcare costs have risen over the years, employers have been faced with the constant struggle of providing adequate healthcare benefits while keeping within their set budgets. According to benefits survey data, employers are budgeting with the expectation that healthcare costs will rise about 7 percent in 2013. To offset this rise in costs, many employers will raise insurance premiums by an average of 5 percent.

New Healthcare Plan Options

The majority of employers in 2013 will offer high deductible plans as a healthcare coverage option. Many of these plans will include a health savings account, allowing employees to invest money free of taxes to pay for healthcare. These plans are a significantly less expensive option for employers, leading many of them to offer incentives with the plans. Approximately 43 percent of businesses surveyed plan to offer a $500 contribution into each employee’s health savings account for selecting a high deductible health plan.

Increase in Wellness Programs

Many businesses are encouraging employees to be proactive in improving their own health. Utilizing tools like wellness programs and incentives, employees are rewarded for improving health habits to avoid costly, preventable conditions, such as diabetes, obesity and cardiovascular disease. According to benefits survey data, 61 percent of employers cited poor health habits as the largest challenge to providing affordable healthcare benefits. To counter this problem, 48 percent of employees plan on using incentives to increase participation in preventative health care programs.

These predictions, based on benefits survey data, will help assist businesses to develop the budget and plan for the changing costs of healthcare benefits for the 2013 year. For assistance determining future employee compensation, WageWatch offers cost-effective reports, including salary, wages and benefits survey data. To learn more about benefits survey data and other services provided by WageWatch, please call 480-237-6130 or contact us online.

 

*Data provided by the National Business Group on Health Employer Survey on Purchasing Value in Health Care.

Posted in Benefits & Compensation on November 28th, 2012 · Comments Off on Employee Health Benefit Trends to Watch for in 2013

Budgeting for the 2013 Wage Forecast

Budgeting is a key management function that occurs every year in your organization. The budgeting process involves the systematic collection of information and data so that the financial resources needed to support an organization’s objectives can be reasonably estimated. The biggest challenge to developing a budget is trying to meet the 2013 wage forecast. Typically, senior management will forecast sales as well as the operational and capital expenses necessary to support their business goal and objectives.

In today’s marketplace, consumers are looking for companies who are innovative and offer top notch customer service. Because consumers are looking for the very best service in addition to great products, it’s important for a business to invest in its employees, as they are the most valuable resource to making the business a success. Remember, employees are the largest contributor to a business’ success in today’s marketplace.

During the budgeting process, senior management may be quick to cut your funding unless you can demonstrate how important the human resources department is to achieving the annual goals of the business using the 2013 wage forecast; and demonstrate to them how each of your department’s functions contribute to achieving the requisite ROI.

From a human capital perspective, the data needed to develop a new budget for the 2013 wage forecast include the following:

– number of employees projected for next year;

– new benefits/programs planned;

– estimated wage and benefits cost increases;

– projected turnover rate;

– actual costs incurred in the current year;

– other changes in business objectives and strategy; and

– regulatory changes that may impact employee expenses.

When developing your next budget, keep these proven budgeting tips in mind:

1.       Human Resources is Essential to Success

Make the connection between human resources and a company’s goals. Senior executives may not always see this, so make sure they understand how important the human resources department is to achieving success.

2.       Demonstrate Return on Investment

Have spreadsheets, done meticulously, to show how every dollar invested in the departments within human resources will pay out to other areas of the business. Also be sure to detail profitability.

3.       Showcase Value of Added Line Items

Show how programs, such as an employee assistance program, create value and save money in the long run.

4.       Consider Including an Unimportant Project or Program

Including a project that is unimportant that you can remove from your budget during negotiations with senior management. It will show them that you are willing to take cuts in some areas and are a team player.

5.       Get Finance Onboard

Meet with the finance department early in the budgeting process, so you have a teammate in the battle with executives. Outline the budget for them and make it clear that good human capital planning can help the business achieve its goals.

6.       Know your budget

No one can understand your budget better than you. When the budget committee asks questions, you need to know them without having to search for the answers. Be sure to utilize a 2013 wage forecast to ensure your organization is properly aligning its budget with current market value.

7.       Start Early

Every department likely will be presenting their budgets to senior management, so make sure that you aren’t the last. Plan to be heard early in the budget meetings, before discretionary funding is allocated.

Using the above tips will help you prepare a better budget for your human resources department that is in line with the 2013 wage forecast, which will benefit your organization by furthering its business objectives. WageWatch offers cost-effective salary and compensation survey reports that will help you with budget planning by providing important information such as competitive salary ranges, turnover rates for key positions and employee benefit packages. To learn more about our services, please call us at 480-237-6130 or contact us online.

Posted in Benefits & Compensation on September 12th, 2012 · Comments Off on Budgeting for the 2013 Wage Forecast