The Wage Debate
One of the challenges we face in Humboldt County is competing for talent with the other, often more urban, areas across our state While many of us who live here will argue that we have a leg up when it comes to quality of life, we cannot argue that we are at a severe disadvantage when it comes to competitive wages.
When I get candidates into my office who are new to the area, I prepare them for what we call the 30% rule. Employees in Humboldt County typically earn 30% less for professional level (mid to upper level) positions than those in the same positions in the state’s more metropolitan areas. Websites such as Payscale.com are a great recourse to check this statement and compare wages across the country.
Since the recession officially ended, we have seen an overall increase in jobs throughout the county. Labor markets are tightening. Despite this, however, we have not seen an increase in wages for the majority of the workforce, with the exception of those earning minimum wage. Minimum wage has seen a number of increases recently, with an increase to $10/hour statewide scheduled for January 1st 2016. While the effect of these increases is a still up for debate, one thing appears certain: employees who earn somewhat more than minimum wage are taking notice and expecting their wages to raise accordingly. According to Payscale.com’s Director of Professional Services, Mykkah Herner, “It’s a matter of getting creative with pay grade structures to accommodate both the need to pay fairly and legally as well as to differentiate jobs that are now getting paid more and more similarly.” There is no easy answer here; if an employer hopes to keep a top notch work force they may be facing difficult choices when it comes to which employees are to receive higher compensation.
In the past, when I received a call to Sequoia Personnel for an experienced general administrative position and an employer asked me “What’s the going rate?” I would typically respond that at minimum they should consider a wage of $12/hr if they want a candidate with experience and a solid skills base. As minimum wage increases, we are finding employees to be much less enthusiastic with the $12/hr wage, which leads to less loyalty from the employee and thus greater turnover costs to employers. With the increasing minimum wage, I now advise my clients to consider increasing the base wages for these entry to mid-level administrative professionals by $1 per hour or more in order to ensure they are competitive in the market.
This brings back to my initial point: Humboldt County already has lower wages than most of the state. As much of our workforce is made up of small and local employers, I expect the rising costs of labor to create an even greater challenge for employers to attract or keep local talent.
The information provided in this blog is intended for general information purposes only. Readers should seek the help of an HR professional for guidance on specific issues.