Income

One of my responsibilities at work is to insure that we remain competitive. In order to remain competitive we have to pay a competitive wage. Employees are forever arguing that their pay isn't fair. It is very seldom true from the competitive perspective, but I completely understand why it feels that way.

Let's say I have a welder who works with us and he makes $40,000/year plus other benefits. If the marketplace pays $40,000/year then I would say the person is fairly compensated. After all $40,000 is the replacement cost for that skill set. If the person wants more $$$$ then they have to bring something else to the table.

If we choose to pay more than the going rate the difference has to be made up somewhere else. But where? Are there areas of cost that competitors aren't addressing, but that we can? If so, great, then I can pay more, but if our cost structures are similar I am relegated to a fair market value. If I don't obey this law of business then I either have to accept a smaller profit margin or I don't get work.

Less profit inhibits my ability to remain competitive, it inhibits growth and investments in new or more productive technologies and if it is bad enough less profits inhibit my ability to maintain existing assets.

Less work means the employee's pay goes down because I have to lay them off. I'm pretty sure this isn't what they want.

Now I know they could get a higher paying job somewhere else. I think anyone could. My particular company sells a commodity and so our strategy is to stay in the bell curve for wages with the rest of the pack. And you could argue that it is a strategy that works since my attrition rates are very low. In fact, we just had an employee who left for more money, return for less than he was making when he left...go figure.

In the end, employees have to advocate for themselves, which is the reason I hear about salary from them. But if an employee really wanted to advocate for themselves they would survey the field for skill sets that pay more and would acquire those skill sets. Can it be as simple as to say just that they aren't willing to do a new thing?

It is not likely the strategy of this old company will change and as I've argued I'm not sure it should in the light of the fact that folks aren't going elsewhere or that we don't fail to recruit new talent as demand grows.

Employees want to be valued and they want to see it in their paycheck. Great minds argue that employees respond to other incentives. Some are weak, like a pat on the back, a sincere thank you maybe, or a token for the vending machine. A little stronger might be company picnics, public recognition, bonuses for jobs well done, more challenging work or the chance to learn something new. Stronger still is opportunity, which very often comes with more cash. And this stronger offering is never possible until an employee takes their destiny into their own hands and improves the value of their offering.

So why is this concept not more readily embraced? I don't believe most people want something for nothing, do they?