What Percentage Of Job Market Is Service
Salary structures are an important component of effective compensation programs and aid ensure that pay levels for groups of jobs are competitive externally and equitable internally. An effective salary structure allows management to reward functioning and the development of skills while controlling overall base of operations bacon costs by providing a cap on the range paid for particular jobs or locations.
The following is a summary of results from a 2009 Culpepper Pay Practices Survey on base salary range structure practices, conducted Aug. 20 through October. eight, 2009, primarily among Due north American applied science, life sciences and health intendance services companies.
Central Survey Findings
• 71 percent of surveyed companies reported having formal base salary range structures.
• 77 per centum of companies with formal base bacon range structures review their structures annually.
• 94 percent use market data when designing salary structures.
• 78 percent utilise traditional salary structures; 11 per centum apply broadband structures.
• 55 pct have multiple structures varying past job and/or location.
• Salary range spreads and midpoint-to-midpoint differentials vary significantly past job level.
Salary Ranges and Structures Defined
A salary range is the span between the minimum and maximum base salary an organization will pay for a specific job or group of jobs.
A salary range structure (or bacon structure) is a hierarchal grouping of jobs and salary ranges within an arrangement. Salary structures are often expressed as pay grades or job grades that reflect the value of a job in the external market and/or the internal value to an organization.
Percent of Companies with Formal Base of operations Salary Range Structures
Lxx-one percentage of surveyed companies reported having formal base salary range structures. However, as companies increase in size they are more likely to accept salary range structures. Less than half of companies with fewer than 100 employees apply bacon range structures. In contrast, well-nigh four out of five companies with more than 500 employees use salary range structures.
| Table ane. | |
| All companies | 71% |
| By number of employees | |
| one to 100 | 42% |
| 101 to 500 | 61% |
| 501 to 2,500 | 82% |
| 2,501 to 10,000 | 81% |
| Over 10,000 | 80% |
Frequency of Salary Range Structure Review
Salary range structures should be reviewed regularly to maintain a competitive edge in attracting and retaining superlative talent. Most companies with formal base salary range structures review their ranges and structures annually, while 17 percentage of companies review salary structures every two or 3 years. Xiv percent of participants with formal bacon range structures reported that they do not employ salary structures with executives.
| Table 2. | |||||
| Job Level | Percent of Companies | ||||
| Annually | Every Two Years | Every 3 Years | Other/ Varies | No Formal Ranges for | |
| Executives | 68% | 10% | 6% | 2% | xiv% |
| Non-executives* | 80% | 11% | 6% | 2% | 1% |
| *Not-executives include directors and managers, professionals, and hourly/nonexempt employees. | |||||
Companies choosing "other/varies" indicated that the frequency for reviewing structures varies by type of job, business unit, location or spousal relationship condition. Examples include:
• Some companies with union employees review bacon structures based on the length of multiyear labor contracts and review other nonunion jobs annually.
• Some companies in very competitive job markets review salary structures for critical jobs semi-annually.
Methods Used to Pattern Salary Range Structures
The two most common methods companies apply to design base salary structure ranges are market pricing using external market information and betoken factor focusing on internal pay equity.
About companies employ a market-pricing approach with current salary survey data for individual jobs to blueprint and conform bacon range structures. Simply 4 percent of companies rely solely on the point-factor method, which assigns point values to jobs within a company.
Twenty-four percent of companies blend market-based and betoken-factor approaches when designing bacon range structures.
Traditional vs. Broadband Salary Structures
Traditional bacon structures are organized with numerous layers and range structures (or pay grades) with a relatively small distance between each range. Traditional structures provide a hierarchal organization enabling employees to be promoted from one pay grade to another. Designed correctly, traditional structures enable the recognition of differing rates of pay for operation and guarantee a reasonable level of control over internal pinch and salary expenditures.
Broadband bacon structures are more flexible and consolidate pay grades into fewer structures with wider salary ranges. Broadband structures tend to be used by relatively flat organizations with few levels and small companies without a dedicated bounty staff to establish traditional structures.
On average, 78 percent of companies use traditional bacon structures while eleven percent use broadband structures. Nine percent utilize a hybrid or mix of traditional and broadband structures.
Unmarried vs. Multiple Salary Structures
L-five percent of companies with salary range structures have multiple structures varying past job and/or location.
As companies increase in size, they typically take a higher number of bacon structures to conform more locations and job structures. Companies with more than 500 employees are more likely to take multiple locations and utilise different salary structures varying by location than companies with fewer than 500 employees.
There is a strong correlation between task level and number of salary structures. Single salary structures are virtually common for executives, and multiple salary structures are about common for lower-level positions. For example, 58 pct of companies have single structures for executives and 63 percent of companies have multiple bacon structures for hourly and nonexempt employees.
| Table 3. | |||||
| Pct of Companies | |||||
| Single Structure | Multiple Structures Differing past Job Office | Multiple Structures Differing by Location | Multiple Structures Differing by Job and Location | Other | |
| All companies | 43% | 21% | 19% | 15% | 3% |
| Number of employees | |||||
| 1 to 100 | 42% | 41% | 8% | 6% | iv% |
| 101 to 500 | 47% | 29% | 8% | sixteen% | 2% |
| 501 to 2,500 | 46% | 18% | 21% | 13% | ii% |
| two,501 to 10,000 | 41% | 12% | 23% | 21% | three% |
| Over 10,000 | 39% | 14% | 27% | 15% | iv% |
| Job level | |||||
| Executives | 58% | 18% | 12% | 8% | 4% |
| Directors / Managers | 43% | 21% | 19% | fifteen% | two% |
| Professional | 38% | 22% | 20% | 18% | ii% |
| Hourly / Nonexempt | 34% | 21% | 24% | 18% | 3% |
| Notation: Pregnant differences were not constitute between manufacture sectors and dissimilar types of ownership. | |||||
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Data Source Data is from the 2009 Culpepper Salary Range Construction Practices Survey of 332 organizations. Survey dates: Aug. xx through October. 8, 2009. Participants by sector: technology 47%, life sciences 12%, wellness intendance services 7%, free energy iii%, engineering i%, other xxx%. Participants by number of employees: upwardly to 100: xviii%, 101 to 500: nineteen%, 501 to two,500: 29%, 2,501 to 10,000: 22%, Over 10,000: 12%. Participants by ownership: public 42%, private 44%, nonprofit ten%, government iii%, other ane%. Participants by location: United States 90%, Canada 5%, other five%.
Culpepper and Associates conducts worldwide salary surveys and provides benchmark information for compensation and employee do good programs.
Reposted with permission
Source: 2009 Culpepper Salary Range Structure Practices Survey, Nov 2009, world wide web.culpepper.com
Related Culpepper Survey Reports:
Salary Range Construction Increases for 2009 and 2010 , September 2009
Salary Increase Budgets for 2009 and 2010 , September 2009
Related Article:
Edifice a Market-Based Pay Structure From Scratch, SHRM Online Enquiry Articles, December 2008
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