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Addressing Employee Pay Compression Issues

Several states have passed new minimum wage legislation for 2019 and beyond.  Arkansas passed new minimum hourly rates of $9.25, $10.00 and $11.00 for years 2019, 2020 and 2021 respectfully.  To compound the impact of higher minimum wage laws, the employment market is becoming more competitive in certain business sectors and organizations are increasing new hire pay to attract and retain competent employees.  Also, the U.S. Department of Labor is considering releasing a new annual salary threshold for exempt positions later this year.

The above factors and several economic factors are pressuring organizations to address employee pay compression issues.  We have experienced an increase in the number of client organizations that have asked for our expertise to address systemic and episodal pay compression situations.

Employees with three to five years of employment do not appreciate seeing or hearing of new employees receiving comparable or equal pay.  Employees believe that their time with an employer and performance/results should drive compensation above salaries offered to new hires in comparable positions.

Addressing pay compression issues and situations includes research on organizational positions, current pay structure, employees’ time in positions, historical pay adjustments for performance, past increases to pay structures for COLA or market adjustments and other pay related decisions unique to each organization.

Addressing pay compression issues can be like working on a picture puzzle and as each piece is placed, the picture begins to form and eventually, the whole picture is realized and appreciated.

Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-2/.

Even 60 Minutes Is In On It

Even 60 Minutes Is In On It

On a recent Sunday evening, the popular show 60 Minutes ran a segment on an important topic that is getting a lot of attention today and part of the Me Too movement. Human Resources professionals around the world have been working to correct this issue for several years. What was different and important to note in the 60 Minutes program, a CEO of a large corporation (over 30,000 employees) was his commitment to have the HR team audit this issue. After the audit was completed, the company spent $3 million the first year to correct the issue. What is the issue? Pay Gender Parity and also, more women in executive company roles. The 60 Minutes piece indicated that women are currently paid on average 20% less than males in the same positions and that the number of women in senior level positions at the large corporation being interviewed for 60 Minutes was only 20%.

As compensation professionals, we have worked with over a thousand companies in the past 32 years. Companies that have a formal compensation and benefits philosophy statement that has been developed and adopted by the Board of Directors and an executive team committed to accomplishing and adhering to that statement do a better job of pay and leadership parity among all classes of employees. A solid compensation and benefits philosophy statement will directly address pay and leadership parity. For pay and leadership inequity to be eliminated, the Board of Directors and top management must commit and follow through on pay and leadership parity decisions.

If you need assistance to determine where your organization stands with this issue, we are here to help evaluate and set the stage to correct any pay and leadership parity issues within your organization.

Learn more by visiting www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-ty/.

Equal Pay Day 2018

EQUAL PAY DAY 2018 Tuesday, April 10

Equal Pay Day is the approximate day the typical woman must work into the new year to make what the typical man made at the end of the previous year. Based on 2016 Census data, the 2018 wage gap between women and men is $.80 (cents).

Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men’s and women’s wages.

Equal pay, comparable worth pay, pay equity and pay for “substantially similar” positions are gaining greater traction at the national and state levels. Federal and State laws are addressing the systemic recruitment, job valuing, and compensation management practices that perpetuate pay gaps between women and men and all employees regardless of their gender, race, ethnicity and age.

Even though the pay gender gap continues through numerous contributing factors, using a defensible and valid job valuing system will help organizations determine if certain positions are “substantially similar” as defined by several state laws that require equal pay for equal work. Proactive organizations that embrace the equal pay for equal work philosophy will utilize proven and new processes to foster equitable pay practices for all employees.

Johanson Consulting, dba Johanson Group, developed and has maintained a proprietary job valuing system for 33 years. This system was licensed to DB Squared in 2006 and it is embedded in the DBCompensation software so human resources and compensation professionals are able to automate the internal job valuing function for their organizations.

Learn more about creating and maintaining internally equitable and externally competitive pay plan structures/scales by visiting www.dbcompensation.com.