Internet Poses New Challenges to Employers
In the past I have examined the how the Internet is affecting the workplace. One more wrinkle has come to my attention recently. Over the past few months, various employers have lamented that they are being confronted by employees seeking pay increases because, "the Internet says I should be getting more."
The Internet has become a leading research tool for students, employees and employers alike. And, yes, salary information is available on the Internet. My own quick check revealed that most of the leading search engine portals use salary or pay issues as a headline attention grabber. "What is your job worth? Click here to find out."
Your next click probably places you in one of the Internet Career or job sites where employers list jobs and candidates post resumes or search job listings for a job. Again, you're likely to see an icon that reads "Salaries for your job."
In fact, one major Internet career site has a billboard along a Chicago area expressway that reads "What your employer doesn't want you to know. Visit www".(I'm not going to repeat their web address) ".com to find out what your job is really worth."
In today’s tight labor market, employees seem more emboldened and some are confronting their employers with wage data from the Internet. Actually this is not new phenomenon. In years past, some of my employer clients complained that employees would bring in to work copies of salary surveys published in the trade publications which served that particular industry.
So what is an employer to do? And just how reliable is this data?
Without further research, it is difficult to assess the reliability or accuracy of such data. In my opinion, the best sources for salary data are salary surveys conducted periodically by employer associations and compensation consulting organizations.
The ready availability of salary data from the Internet and the continued tight labor market mean that employers should not just brush off an employee's wage inquiry. While many employers like to say "Employees are our most valuable asset," these same employers also see salaries as an expense item on the balance sheet. In fact, depending on industry, this expense item can range from 40 percent to 90 percent of organizational expenses.
For employers, this is a delicate balancing act. Paying low wages reduces the salary expense, but it causes hard to measure costs associated with poor morale, turnover and recruiting difficulties. Paying high wages may please employees, but unless there is a corresponding increase in productivity, the employer's products or services are overpriced and the firm cannot make a profit or remain competitive. Look at our empty factories and the loss of high paying manufacturing jobs; many of those jobs are now performed in Mexico and the Far East where wages are lower.
The employer’s best bet is to provide a fair competitive wage and to be up-front about communicating pay information to employees. This is best done by periodically conducting a pay study checking one or more pay surveys. Then define some pay guidelines which correlate pay to objective measures such as performance, productivity, knowledge or skill. Budget pay increases to reflect individual as well as organizational performance. Train supervisors to deal with pay and performance matters.
Consider this: we price our products or services competitively in our bid to get customers. Likewise, the highly competitive nature of the labor market now dictates that we bid competitively to get good employees.
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William S. Hubbartt is president of Hubbartt & Associates, a St. Charles, IL consulting firm specializing in employee compensation, employee handbooks, personnel policies and supervisory training. Mr. Hubbartt is the author of The Medical Privacy Rule - A Guide for Employers and Health Care Providers.
