1. OHSA Specialist Conference Eagle Crest April 6, 2017
WAGECOMPRESION
OHSA Specialist Conference
Eagle Crest
April 6, 2017

2. Masters in Management
Graduate degree emphasis in Nonprofit Administration
Post-Masters Certificate in Nonprofit Leadership
UCLA Johnson & Johnson Head Start Management Fellow (Class 2007)
Worked in Head Start(s) for a total of 22 years
Retired, but can’t seem to stop…

3. Definition of Wage Compression:
Used two different ways:
When new hires are offered a wage very close to and sometimes more than current employees or lower performing employees.
When outside forces (or time) causes the salary schedule used to begin to compress so that there is a narrowing difference developed between positions of varying responsibility and skill requirements.

4. Why is Wage Compression a Concern:
Can be demoralizing
Lead to widespread dissatisfaction
Cause more experienced employees to leave
Could violate equal pay regulations or discriminatory wage practices

5. Assessing Wage Compression Basics:
Evaluate Salary Schedule
Break down to common denominator – usually per hour
Determine pattern(s) if any
% between steps
% between positions starting at minimum wage (if applicable)
% between lowest pay and highest pay

6. Assessing Wage Compression Basics:
Compare Salary Schedule to What is Being Paid
Is nearly every incumbent at the top step?
Are new hires starting at higher steps?
If direct reports exceed the following:
95% - immediate attention needed
80 to 95% - watch carefully and address as possible

7. Assessing Wage Compression 101:
Compare Salary Schedule to Peer Employers
Review available salary data
Complete a salary survey
How does the organization compare?

8. Assessing Wage Compression:
Where are areas of concern?
Between entry level and mid-level staff?
Between specific positions?
Between supervisors and their direct reports?
Ability to recruit?
What will the next few years look like with minimum wage changes?
The standard counties will see the minimum wage increase 38.5% over the next 6 years

9. Create a Strategic Plan to Address Wage Compression
Start by doing a complete analysis
Identify areas of concern
Work with the appropriate leadership
Develop a Salary Schedule with desired “patterns”
Develop a plan to address most critical areas first
Ensure included in budget discussions
Who might be a stakeholder?
Union
Specific department leadership
Develop or maintain wage policies that limit/control pay equity, budget constraints, pay increases to recruit
Often unpopular, but nearly every effective company has such policies