Salary Range Structure Advantages

From time to time some of our clients will feedback to us that they don’t like salary range structure as it keeps them from being able to offer new hires and/or pay existing employees whatever they want to provide them. Thus, there is a tendency to throw out the salary range structure for the reason that it is too restrictive.

We believe salary range structure(s) is an effective compensation management tool and the advantages outweigh the disadvantages for organizations. Below are common pluses for establishing and adopting a formalized salary range structure.

  • Allows for a starting minimum, market midpoint and maximum pay range for each position based on the internal job value and current external market pay levels.

  • Provides a communications tool with the employee to speak to their development within the position and how their pay can increase through performance and time.

  • Creates consistency and defensibility around pay equity, pay adjustments, promotional increases, and other factors influencing pay.

  • Can slot in new hires and promoted employees into a new position based on what they bring to the position as it relates to experience, education, and skills.

  • Determines in concrete terms those that are behind, in the mix, or ahead based on where the employees are located within their respective salary ranges.

  • Establishes multi-level career ladders for career-minded employees that desire to progress up through the organization.

  • Maintains a maximum for each position to avoid overpaying and using those funds to ensure employees in the lower end of their salary ranges are moving up towards market midpoint.


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The Rising Tide of Minimum Wage

Bruce and I just completed an article titled, “The Rising Tide for Minimum Wage” for the HR Professionals Magazine September, 2021 issue that will be published in early September. This article provides information on several factors that are influencing a continuous rise in minimum wages for the lowest paid employees across the United States. The HR Professional magazine is a great resource for human resources and compensation professionals. The articles published in this professional magazine are current and comprehensive. Please seek an online copy of the HR Professional magazine and add this resource to your list of sources for staying current in the field of human resources. Here’s a link to their website: HRProfessionals Magazine


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Inflation’s Impact on Compensation

Stephen Miller, CEBS has written a three-part series article for SHRM titled “Inflation’s Return Will Affect Compensation.” The first part was published earlier this week on Compensation and the other two parts will focus on health care and retirement savings. Through his research and discussion with other thought leaders, he mentions several factors that are going to drive up inflation and compensation. These include:

  1. Increased federal unemployment payments have reduced the labor supply;

  2. Disruptions within supply chains have placed inflationary pressures on prices and wages;

  3. Consumer Price Index (CPI) in May rose 5 percent from 12 months earlier which is the largest yearly gain since August 2008;

  4. Federal Reserve Bank of St. Louis indicated that the economy is seeing more inflation than they expected which they believe could lead to an interest rate increase late next year.

Though it is still early for all the big compensation consulting companies to provide their 2022 wage and salary growth figures, Stephen mentions Trading Economics, which is an online platform providing historical data and economic forecasts, is forecasting a 3.6% increase for 2022 and a 4.0% in 2023. He also mentioned that Kiplinger is forecasting that the Social Security cost of living adjustment (COLA) for retirees will be around 4.5% next year.

Stephen completes the article by mentioning what some other compensation experts believe employers will need to focus on as inflation returns after being a non-factor for several years. These include:

  1. Increase hourly rates by $1 to $2 every three to six months as a retention tool;

  2. Retention and sign-on bonuses for professional and management-level positions;

  3. Revisit total rewards strategies for the post baby boomer generations.

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How Are Organizations Utilizing Retiring Baby Boomers’ Compensation?

How Are Organizations Utilizing Retiring Baby Boomers’ Compensation? One of our public clients has experienced 17% turnover during the first eight months of 2018. The average tenure of the employees leaving this organization is almost 5.5 years and a measurable group of these employees are retiring baby boomers. The average pay variance between the new hires and terminated employees for the above mentioned client is 16.7% or about $6,365 dollars per employee. With the impact of daily baby boomer retirements, we estimate that organizations will have between 10% and 25% in total compensation dollars to reallocate within their annual employee compensation budgets. For small to large organizations, the amount of freed-up dollars associated with baby boomer terminations due to retirements can be significant and useful for taking care of high priority compensation needs. Some of these needs will include new hire replacements, funding variable pay incentive plans, addressing pay compression and pay inequity issues, bonus pay for top performers and a variety of other pay initiatives. For organizations with remaining baby boomers that will retire in the next three to five years, how will you plan to use their 4th quartile base pay salaries to fund other compensation needs? Learn more by visiting or request a free consultation by visiting

Useful Job Descriptions Pay Dividends

Alan G. Crone, Attorney with Crone Law Firm, PLC wrote an article in the HR Professionals March issue titled, “The Business Case for Compliance”.  Mr. Crone, with over 25 years of employment law, mentions in his article that he is often asked what lessons he has learned that HR Professionals can apply to lessen or mitigate employment lawsuit and litigation expenses.

Alan recognizes that employment law is complicated, ever-changing and hard to manage with employee and employer value differences.  He states in the article, “There are no simple solutions, however I do suggest three simple strategies as a great start, that if you follow them you will reduce the number of employment related claims, complaints and lawsuits:

  1. Draft and maintain hyper-accurate job descriptions;
  2. Communicate clearly the company’s expectation for employees and confront them when they do not live up to those expectations; and ,
  3. Refocus compliance efforts as training rather than as discipline.”

This article continues with Mr. Crone going into more detail on how these simple strategies can be applied with good common business sense and thorough application.  As human resources professionals for our respective employers, what are the dividends we can expect by implementing a useful job descriptions strategy as noted in Alan Crone’s article.

  • More informed candidates
  • Improved staffing and compensation decisions
  • Accurate and current job descriptions
  • Positive impact in management decisions
  • Greater defensibility
  • Compliance with ADA – reasonable accommodations
  • Compliance with FLSA – Exempt / Non-exempt (duties and responsibilities)

Mr. Crone completes the Job Descriptions section of his article with the following statement, “Top-notch job descriptions will create operational efficiencies, less lawsuits, better hiring decisions, more focused training and discipline, and less turnover.”

As human resources and compensation consultants and software providers, we support Mr. Crone’s advocacy for comprehensive, consistent and compliant job descriptions.  The time spent with bringing dated job descriptions to a current and accurate status will pay dividends for internal and external stakeholders.


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