Category Archives: Compensation

“Equal” Is a Stretch

Guest post by our self-proclaimed “Compensation Geek” Meghann Bedell, hermetically sealed to guarantee freshness.

Equal means equal,” she said. “The truth of it is the older an actress gets, the less money she makes. It’s inexcusable that we talk about equal rights for women in other countries and yet…we don’t have equal rights for women in America. It’s time for all the women in America and all the men who love women and all the gay people and all the people of color that we’ve fought for, to fight for us now.” – Patricia Arquette

Equal pay for women, how long have we been hearing about this issue?  It seems to be a political hot topic every four years and it tends to get people on both sides of the aisle equally stirred up. It even received a special mention at the Oscars!  There’s even a special White House webpage where any woman can go to read about how the government is on her side.

Now let’s take a step back and really look into this issue.  If it’s important enough for an Academy Awards acceptance speech, then it’s probably important to know about.

We will start way back to 1963 when John F. Kennedy signed the Equal Pay Act, which makes it illegal for an employer to discriminate with regards to pay.  This law is enforced by the Equal Employment Opportunity Commission (EEOC), and violations could potentially result in large penalties and fines.

Now fast-forward 50 years, and we are still talking about the same issues.  Lets look at the Bureau of Labor Statistics and their most recent stats on women’s earnings.  The National 2014 Data takes a look at the entire nation’s wage information. When looking at these stats please notice the focus on the following sub categories: Race and Ethnicity, Educational Status, Age and Marital Status.

This information is interesting because only one point matches to what is truly reviewed when looking at compensation for an employee.   The categories that we review when completing a compensation analysis are the following: Years of Experience, Education, Certifications, and Military Service. The only matching aspect from the National Data is the Education level.

What is missing in this analysis is a breakdown in the types of jobs that the people are in and how many years of experience they have in relation to the specific job. Years of experience is calculated the same for both men and women.  The National Data, however, does not mention anything about years of experience.

They do, however, include age, gender, and marital status. Is that strange? Why would the data that is used by our government and politicians include those aspects?  Could it be that they are trying to use data to sway your opinion?

Or, maybe Patricia Arquette should have mentioned what Ethan Hawke was paid for his role in the movie?

Status Check

***Another guest post from Meghann Bedell, our Gen Y Compensation Geek***

Did you think that you finally made it when you got your first salaried position?

That’s how I felt too before I became “exempt,” too. I quickly realized that the change was minimal.

For those of you who don’t know, exempt and non-exempt are how the department of labor classifies jobs.  Basically, some jobs are determined to be exempt from overtime, hence the “exempt” status.

Companies determine which jobs are exempt and which jobs are non-exempt by using an exemption “test.”

I’m not sure when it happened, but somewhere along the line there became a stigma regarding being exempt.  Some false belief that being exempt means that the position is more valuable to the organization than a non-exempt position.

It seems that everyone wants to be exempt because they think that something magical happens when they become exempt.  I’m not sure what, but I’ve racked my brain and this is what I could come up with:

⁃    More Money:  This has to be it!  Everyone wants more money, right?  Well that’s not always the case.  See once you are exempt, you will not be paid overtime.  Remember when you would work extra hours and see that awesome bump in pay? I’m sorry, but when you are classified as exempt you are responsible for working the extra hours and you will be paid for the first forty hours you worked……and that’s about it.

⁃    Hours Worked:  Maybe people think that when you’re exempt you are only responsible for working 40 hours.  This is not true either.  Actually, you will be responsible for getting the job done, no matter how many hours it may take.

⁃    Recognition: Oh I know, that exempt position will provide them with the recognition that they deserve.  I hope that happens, but in the majority of cases, being exempt just gets you more work.  This extra work does not exactly equal more recognition.

Honestly, though, I think that this viewpoint goes way back to the days of the “blue collar” and “white collar” jobs.

At one point these classifications of blue vs white collar positions were accurate; the “blue” collar was the laborer, the “white” collar was management.  But as we have progressed as a workforce and as jobs have evolved, these classifications have become less relevant.  Now, when we determine whether a job is exempt or non-exempt, we are not determining the worth of the position to the organization, but rather the best way to compensate for specific job functions. I find it ironic that consultants are paid an hourly wage, but they are hardly viewed as “blue” collar or non-exempt. It’s all in the perception.

So the next time you think that it’s “about time” that your employer recognized your excellence and allowed you to enter the wonderful world of exemption – just please take a moment to review all of the current perks that come with your current position.

And be careful what you wish for.

Millennials and Retirement? Comp Corner…

Time for another post from our little Compensation Geek, Meghann Bedell:

Are you ready for your retirement, Millennial buddy? Yes, I know you’re 20-something years old, but bear with me – 401(k), 403(b), Ira Roth, IRA do you know the difference? What does your company offer? Do you even know?

Are you making the mistake of thinking who the hell cares about retirement – I’ve got 30 years to save.

Let me say this loud and clear – it’s never too early to start saving. For the more stubborn folks, I repeat, NEVER TOO EARLY!

Millennials (and everyone else) remember the unprecedented collapse of the economy in 2008/2009.  I personally know some people who lost everything (and if I know someone I know that most of you know someone too)!

This all happened when my class was graduating college…what a great starting point for us! “Congrats on all of your hard work, but….” – now it’s time to compete with people that have 10+ years of experience in a job with a company that may or may not be around in the next five years.  Oh, and remember what we were telling you about the “Baby Boomers” moving out of the workplace?  Well that’s off the table, too, because the majority of them just lost all of their savings, and they will be in the workplace for another 15 years. Good luck!

If you were fortunate enough to find a job at that point then I say hold on to it for dear life and don’t let go – but now five years later the economic situation has stabilized a bit (not recovered, mind you), and more people are getting permanent positions.  Now you are asking, what’s the moral of this long-winded terribly boring story?

It’s important to save what you can now because it’s not a guarantee that the option will always be there. Not tomorrow, not next pay period, not next year…. Now!

Most employers put a freeze on matching a portion of what their employee’s contribute to retirement plans when the economy went south, but now they have lifted that freeze and are offering you free money. All you have to do is be smart enough to take it.

It doesn’t take 50%, 25% or even 10% of your pay – Contributing as little as 3% of your pay will make a difference over the course of a year.

More good news – if your company offers you a retirement plan then I bet you they offer payroll deduction for your contribution – that means the contribution comes out on a pretax basis and that in turn lowers your taxable income – a win-win for you!

 

Don’t let articles like this be right.  Don’t let a false belief that you will live forever, or the thought that “the recession is over” prevent you from saving for your future now.

Portion Control

Say hello to our new Compensation Contributor, Meghann Helman Bedell…self-admitted compensation geek and keeper of the flame at GenYHR.

This is it…the one time each year when we suck it up and ask for more money. It seems reasonable; you work hard, you showed up on time, you definitely deserve more than Charlie, why would you be denied? Could it really be as a simple as “yes” or “no” from your manager? It’s not like you’re asking for a big raise, it’s only a few more dollars per week.

You are not alone.  Actually, this time of year it is very common for employees to begin to look at their compensation and wonder what the New Year could possibly hold for them.  It’s also the time of year when businesses begin to look at their finances and being to plan for their new fiscal year.

The foundation of employee compensation can be explained in the laws that the government has put into place like this one, that one and this other one.  Companies are incentivized to do their absolute best to make sure that their pay practices are fair and equitable. If companies are found to be in violation of these laws, then the consequences can be very severe and expensiveportion-control

Working in HR, I often hear the following phrase “This is a big company; they make enough money to pay me another $.50/hr”. It’s understandable not to understand all of the nuances that effect compensation when you do not work with it every day. So, it should be no surprise that there are applicants, employees and even random people who actually believe this statement. These people have come to some sort of random conclusion that compensation is just their base rate of pay, and that the company that they work for or want to work for is just being plain greedy.

Let’s take a look at this logically.  If your position is a 40 hour per week position, then a $.50/hr increase to your base rate of pay would be an additional $1,040/year. If your company is nice enough to offer you benefits, then please remember to add on the expense for your benefits. This expense is approximately 15% – 33% of your annual salary (please note that this is an estimated/average cost and the actual percentage will depend on the company). Don’t forget if your employer has a retirement program (pension plan/401(k) or 403(b) match program), then that would be an additional 5%-10% annually (estimated).  Also, please add in the increased cost of any shift differential, overtime, on-call pay, holiday pay, sick time off, vacation time, preceptor pay, education pay, etc ……these would all be costs incurred by the company.

Finished doing the math? How much does it come out to be? I bet it’s a little more than you originally thought, right!

When you are finally get up enough nerve to have a compensation discussion with your boss again, just remember to keep in mind what that company invests in you already.  I’m sure you are worth that extra money, but make sure you let your boss know that you are appreciative and understand the monetary commitment that the company has made to you at this point.

Besides, Charlie is probably lying about what he’s making, so to hell with him.