The Manila Times

The practical approach to doing salary surveys

REY ELBO

UNIQLO, a popular Japanese casual clothing retailer, will be raising its workers’ wages by as much as 40 percent. Before you start rushing toward your boss’ office, you have to understand that this is one of a very few exceptions happening in employer circles. It is unique in the sense that a campaign to this effect is being spearheaded by Japanese Prime Minister Fumio Kishida.

Kishida has repeatedly called for companies to increase salaries ahead of spring labor-management negotiations in response to inflation, mainly in food and fuel. It is also seen as an influential call to resolve Japan’s decades of deflation and corporate cost-cutting that could be followed by the rest of Japan Inc. Another reason is Japan’s shrinking job market.

Aside from Uniqlo, there are a good number of Japanese companies that have also “significantly boosted their rate of pay increases,” according to a Reuters report. But Uniqlo’s sharp 40-percent pay increase is a high ball compared to, say, Suntory Holdings’ plan of a 6-percent wage hike. Japan’s average annual pay by the way was $39,711 in 2021, way below the average of $51,607 in other member countries of the Organization for Economic Cooperation and Development.

In the Philippines, the median pay hike this year is expected to be 5.7 percent based on a forecast by Willis Towers Watsons (WTW), one of many global consulting firms specializing in management consulting. This is slightly lower than 2022’s 5.5 percent. Whether this increase is reasonable is debatable if we are to ask the labor unions.

But even without labor’s perspective, it is easy to see that a 5.7-percent increase is clearly overshadowed by the 8.1-percent inflation recorded in December. Of course, we have to understand that the WTW research was done months ahead of Philippine Statistics Authority calculations. The fact also remains that December holidays are one of the causes why prices remain statistically high year after year around the globe and not only in the Philippines.

Should employers pay what’s

being told us by the WTS’ latest survey, which gathered inputs from participating employers? There are many factors to consider. One is the tightening labor market. How can you attract and maintain key talents if you keep on paying below the market rates? WTW said that 86 percent of those surveyed had difficulties in hiring in 2022. The number is slightly lower at 84 percent in terms of retaining talent. How would you manage this situation?

Salary surveys and research forecasts can help employers decide. After all, it’s more expensive to hire replacements if we are to consider the time needed to advertise job vacancies, evaluate candidates and train them, among others. If you want the best salary guide, an imperative approach is to conduct it yourself with the help of an independent consultant. You should focus on a specific survey covering three to five competitors in the top tier of your industry.

Of course, it will be difficult to do that given that they’re competitors. The solution is to limit the survey to a minimal conclusion. Identify the top three key positions in your company and compare it with your attrition rate. Then offer to discuss current pay at the entry level, average pay and the maximum package alongside the length of service with the competition. Offer to host a one-time meeting in a neutral venue, say a hotel. After the meal and pleasantries, exchange the data in sealed envelopes. It’s the kaliwaan (on the spot exchange) approach.

Try it and you’ll be surprised on how organizations can be receptive to reciprocity. If you’re successful, you can establish an informal setup where you can meet your counterparts once every two months or something like that to share key information on, say, how to handle early quitters.

This is the predicament of a client who is currently experiencing a high rate of new employees backing after only three to four days of onboarding. When they analyzed the situation using the Fishbone Diagram, they discovered a host of issues that were not prevalent before. The most likely reason for the early quitting appears to be complex procedures and unsafe machines. If true, we then go back to my mantra that “problem workers are created by problem managers.”

The best answer is to do a comprehensive analysis of work systems and procedures. Is there a better way of doing things? As a kaizen practitioner with more than 35 years of experience, I know it’s the only way. After all, “a bad system can beat a good person all the time,” W. Edwards Deming said. If you still don’t know what it means, then I don’t know what to say.

Business Times

en-ph

2023-01-24T08:00:00.0000000Z

2023-01-24T08:00:00.0000000Z

https://digitaledition.manilatimes.net/article/281925957139309

The Manila Times