What's In a Rate?
Five Factors That Impact Wages
By Chris Alfe, thingamajob.com Staff Writer
If all goes well during your job search, you may be fortunate enough to be faced with a dilemma - which job offer to accept. And while you will typically consider multiple factors when making your decision, the verdict often revolves around one particular piece of information, the pay rate.
As it turns out, a comprehensive evaluation of proposed base pay rates touches on a host of important and diverse factors and is a great comparative approach to guide you towards your final job choice.
When comparing rates, however, be careful to take into account variables that will impact the fair and prevailing wage in your region. If you fail to adjust proposed wages for these factors, you'll be comparing apples to oranges. In addition to geographical region, be sure to consider the following factors:
Five Factors That Impact Base Wages
u Career Growth Opportunities. Some career opportunities serve as career investments. If you have the opportunity to work with new and in-demand technologies or to gain experience in a hot industry, the work experience you'll gain may, to an extent, offset lower than average base wages. Consider this fact when evaluating your job offers.
u Health & Welfare plans. Employee benefits can add twenty, thirty, even forty percent or more to the overall value of total compensation. Medical and dental benefits typically have significant value so long as the premiums are reasonable and the coverage levels, co-payments and terms are competitive. Perks such as life insurance and supplemental accident insurance also have value and should be considered. Some HR departments can provide you with an estimate of the cash value of a benefits package so you can properly compare offers. A job offer with a slightly lower base pay but excellent health & welfare benefits may be notably more valuable than one without these benefits.
u Paid Time Off. Employees eligible for vacation and sick-time, as well as those eligible for holiday pay, can easily estimate the cash value of these perks. Simply take the paid time off being offered in hours and multiply by your hourly rate. An individual with an annual salary of $50,000 who is offered 18 total paid days off will earn over $1,500 more per year in total compensation compared to one with the same annual salary but only 10 total paid days off.
u No Travel Required. Jobs that require any significant traveling should, all other things being equal, pay more than those that do not. Be sure to inquire how your travel expenses will be reimbursed; if reimbursement is through per diem, ask the hiring manager or recruiter what the current rates are and see if they are adequate. Try to get the employers to commit to an estimated "worst case" traveling percentage as well, and learn if the traveling will be local, regional, national or international. (Jobs with significant national and international travel requirements command an additional wage premium of at least 20%).
u Employment Type. Because of the risks associated with contract-based work, hourly contractors generally make higher wages overall than their salaried counterparts. Shorter termed contracts generally yield even higher premiums where long term contracts typically demand less, all things considered. Temp-to-perm arrangements usually demand less than traditional contract assignments since less risk is assumed by the employee.
Chris Alfe is a staff writer for thingamajob.com. He has ten years of experience in staffing and human resources and currently resides in Baltimore, Maryland.
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