With the holiday season set to kick into high gear, the demand for hiring seasonal temp workers around the country is heating up. With unemployment at record lows in the United States, the competition for workers at all levels is high, and many companies are struggling to set competitive wages for non-exempt and hourly workers. And the problem isn’t limited to just the retail industry as you might think — the need for these types of workers permeates many industries as the result of a variety of factors we will delve into below.
The bottom line is that across the board it’s more crucial than ever to understand how to attract and retain non-exempt and hourly workers for the busy holiday season and beyond using micro-market pay data, or data that drills deeper into local area wages.
Factors Impacting Local Pay
Geographic differences play an important role in informing pay and need to be taken into consideration when finding non-exempt and hourly workers. The following is by no means a comprehensive list, but rather a compilation of some of the most common factors impacting pay at the local level that we’ve been hearing from clients.
- Minimum wage in flux: With the ongoing debate on and evolving environment surrounding minimum wage, it’s more difficult than ever to continually keep abreast of changes in market pay. For instance, if a big city like Chicago increases its minimum wage, it most likely will create a ripple effect for wages in the surrounding communities as well.
- Opening in new locations: As part of their expansion plans, some companies are opening up new warehouses or distribution centers in new locations. However, they don’t always know what to pay employees in those specific areas, prompting the need for micro-market data.
- Competing with corporate giants: Some of our clients call and say, “A large e-commerce giant is moving into ‘x’ town or city. We need to find out what they’re paying non-exempt and hourly workers so we can stay competitive.”
- Retaining key players: Paying competitive market wages is particularly important for key locations, jobs and individuals. First, you need to identify the key people and roles in your organization where you cannot afford turnover. Once you have a better understanding of critical players, you can determine what you will need to pay them to stay.
- Verifying employee claims: Compensation professionals need to be able to corroborate when non-exempt and hourly workers point to a competitor down the street that they say pays $15 an hour vs. $14.50. If you have the data to be able to determine what is really happening, it will put your organization in a better position to react to these types of comments.
- Competing with unconventional hiring techniques: If there is a company adopting an unorthodox method of recruiting non-exempt or hourly workers — for example, offering 25% higher wages than what others in the area are paying — you need to be able to know about it and speak to prospective workers when asked.
How Competitive Are Your Local Wages?
How do you plan to target key people or roles where you can’t afford turnover? Do you understand how myriad factors will influence the local pay landscape? How can you keep your wages competitive amidst growing competition?
When it comes to attracting or retaining hourly or non-exempt employees, you need to know how competitive your local wages are — and using micro-market pay data will help.
To attract and retain non-exempt and hourly employees, you need to take these steps:
- Benchmark your wages. Have you tried benchmarking against the market to see what adjustments you may need to make to stay competitive? Do you know if your wages are over or under median market rates?
- Understand where workers are needed. Have you been able to identify the most in-demand markets by looking at the number of job openings for a given location?
- Do competitive research to see what your peers are doing. Do you know who your biggest competitors are by ZIP code as well as the average pay across positions?
Figure 1 below shows Aon’s new Micro-Market Pay Analyzer tool, which provides precise and accurate local salary data so you can benchmark your wages. Leveraging the tool, you can see wage rates at different locations, identify which ones are over or under median market, look at additional pay information including hourly rate ranges.
Comparing Pay Data Within a Local Market
In today’s dynamic and fast-growing economy, broad market data doesn’t cut it. Pay is increasingly influenced by local economic factors within the U.S. where geographic differences have long been viewed as important considerations to attracting and retaining workers. That’s why digging deeper into micro-market pay is more crucial than ever.
Ready to gain access to the precise micro-market salary data you need to retain your non-exempt and hourly employees? Precision benchmarking for non-exempt and hourly employees is easier and more cost-effective with Aon’s new Micro-Market Pay Analyzer (MPA), created by our experts to be the most comprehensive interactive data visualization tool on the market.
Contact us now to ask specific questions to our compensation experts and to get a demo of Micro-Market Pay Analyzer.