Paycheck to Paycheck: Compensation Standards
It’s the most common question our Human Resources pros are asked:
“What should I pay my employees?”
The truth is that this is a somewhat complex question to answer because there are so many variables. Different hospitals have different pay standards that are based on size, revenue, and geographic location. As an example, a kennel attendant position may be a minimum wage job in Wyoming—but can pay over $16 per hour in California.
When setting the compensation rate for a new hire, here’s what you need to consider:
- What would this person earn at a competing hospital?
- What am I paying other people in this role?
- Do this candidate’s qualifications justify a higher wage?
Let’s evaluate what you should be thinking about for each of these.
What would this person earn at a competing hospital?
This is not always the most straightforward question to answer. It can be challenging to call a local hospital and ask, “what are you paying your receptionists these days?” It can be legally perilous to do so as well, as some companies have been sued for “wage fixing,” or paying near-identical wages to limit employee turnover. That doesn’t mean it’s impossible to find out, however. Here are some ways hospitals learn about what other hospitals pay:
- Practice Manager Groups: Ask around at local practice manager group meetings. Simply asking won’t hurt anything, and offering to share your average wages can encourage a response. Don’t push too hard, though, as you don’t want to make an enemy of your peers!
- Payscale, Glassdoor, and other job posting sites: At these sites, workers can log on and report their location and wages. Be advised, however that because this information is self-reported and unmonitored, there can be a wide variance in the accuracy of the information.
- O-NET Online: This is an excellent place to get accurate wage information because the pay rates reflected on this site are reported to the government when someone applies for unemployment. This information is then verified with the employer. The search function allows you to narrow the results by city, so you can see what a veterinary technician’s average wage is in your area. Some rural areas may not have substantial data, but you can look at your nearest city for a baseline.
What am I paying other people in this role?
This is an important question. It is illegal to forbid your team to discuss wages. As a result, everyone on your team knows what everyone else is making. If you hire someone lower than the typical wage for that position, the team member will feel devalued and could even use it as a reason to sue you for wage discrimination. If you hire someone in higher than the typical wage, it will cause wage compression and discontent among the team.
Always consider what others in that role are making currently. You can hire someone for slightly less than others make to account for the training that will be necessary. You can also adjust if the rest of the team has been in the hospital for a very long time and has received wage increases over the years. The best thing to do is create wage ranges for each position in the practice and ensure that new hires are always offered wages within that range.
Do this candidate’s qualifications justify a higher wage?
We never recommend hiring a new team member at a higher rate than your tenured employees. Doing so can set the stage for bitterness and discontent in your team. Worse, suppose you hire a male candidate at a higher rate than tenured female employees (or other female employees who recently started). In that case, you are walking right into a potential discrimination lawsuit.
If your wage ranges are well-researched, you should be paying a competitive wage for each position. You can choose to hire a new person at the higher end of the wage scale if they are indeed a spectacular candidate, but we do not recommend exceeding your set wage range.
If you do choose to hire someone and pay them a higher rate than others are making, we recommend increasing everyone else’s wages so they at least match the new person’s wage. Yes, this can be an expensive investment but ultimately worth it if you are faced with losing a stellar candidate or eroding your team’s morale.
WAGES AND BENEFITS