The True Cost of Employees

Dear Anita,

My wife and I have a mom-and-pop shop with a dozen employees. One of my workers acts like I’m being a cheapskate with his salary, hinting he deserves a big year-end bonus. I try to pay a competitive wage, but I have to make a profit, too. How can I communicate the economics of a small business?

Dear, Pops,

Total_Compensation_Statement

Payscale’s Total Compensation Statement shows the employer’s contribution in addition to the wages.

Employees often think that their salary is the only cost to the employer for their services. They often do not realize that taxes, workers’ compensation insurance and even the cost of “Mom” completing the paperwork can cost your business another 30 percent in payroll costs.

I assume that you have done salary comparisons for the job title in your geographic region to ensure that you are, indeed, paying a living wage that rivals your local competitors. If you are, a little education may illuminate the realities of employer-paid contributions to all of your employees.

“Total Compensation Statements” can include line items such as:

  • Base pay
  • Bonuses
  • Vacation/PTO/sick days and other paid leave
  • Payroll taxes (Social Security match, Medicare, state unemployment insurance tax)
  • Employer-paid portions of insurance plan premiums (health, dental, vision, life, disability
  • Employer contributions to employee’s retirement plan, such as a 401(k) or pension
  • Stock options or profit sharing
  • Annual usage value of a company car
  • Value of any other fringe benefits offered, such as:
    • Fitness club membership
    • Cell phone service
    • On-site child care
    • Free or discounted public transportation or parking
    • Tuition assistance/professional development
    • Company discounts

Non-quantifiable perks may include flex time or on-site facilities available for employee use. For new hires, include one-time benefits, such as relocation expenses or signing bonuses. There are handy Total Compensation Calculators online.

While a Total Compensation Statement can illustrate the true cost employers pay for an employee, it has the potential to backfire as a teaching tool. Workers may feel you are fudging the numbers if you “double-count” vacation or PTO and they don’t really receive additional pay. Also, if an employee does not use a perk, such as child care, then the value is moot for them. A pitfall with salaried employees may occur if they feel any overtime is not valued since it won’t be reflected in the compensation.

Employees who may be shocked to learn that their $40K annual salary is actually costing their bosses around $52,000 may be a little more grateful, or at least have a greater understanding of the realities their employers face.

Readers: Have Total Compensation Reports opened your eyes to the true costs your employer faces?

Do you have a job-related question? Ask Anita.

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Thank You for the Interview

A reader writes…

Hi, Anita:

I was fortunate enough to land an interview at a manufacturing plant close to where I live. I am very excited about the possible opportunity to gain employment with this company and want to leave them with a lasting impression. What can I do post-interview to continue to spark their interest?

Dear, Eager to Please:

Congratulations on your interview. Getting your foot in the door and meeting face-to-face with the hiring manager is a huge leap toward gaining employment. Now that you have aced the interview, it is time to seal the deal with a little something extra: a great “thank you” note.

Thank you notes are a great way to show how much you value the interviewer’s time and appreciate their interest in you. It also lets them know that you are serious about wanting to be their next stellar employee. In my personal opinion, thank you notes are a requirement after every interview. Follow these simple steps, and take five minutes out of your day to help land the job you desire!Thank you

  • Ask for a business card from the hiring manager before you leave the interview. You should always do this at the end of the interview to make sure you have the correct contact information and address.
  • Select a professional stationery or card on which to write your “thank you” message. Avoid unprofessional imagery or loudly designed cards. Some hiring managers may prefer email communication. In this instance, it may be appropriate to send an email. If you are unsure on which method is best, do both. Send an email and mail a hand-written letter.
  • Address the interviewer using Mr., Mrs., or Ms. For example, if you are interviewed by John Employer you would write Mr. Employer. It is best to be too formal than too familiar.
  • If you are sending a card, address the envelope and write the card by hand. This makes the card more personal and shows that you took extra time to write it just for them (not mass-produced).
  • Choose a message that resonates with the hiring manager and include some information from your interview. Below are two examples that you can use as a guide.
    • Dear, Mr. Employer: Thank you for taking the time to discuss the (Job Title) opportunity with me on (Date). I believe my previous experience and skill set make me an excellent candidate to join your team, especially since you mentioned that (Issue) was a challenge you wanted to tackle. It was truly a pleasure to meet with you, and I look forward to hearing from you. Best regards,
      (Your Name)
    • Dear, Mr. Employer: Thank you for meeting with me to discuss the (Job Title) opportunity at (Company Name). Your insights and additional information about (Job Responsibilities) were very helpful and helped solidify my belief that I am the perfect candidate for the position. I look forward to hearing from you soon, and thank you again for this opportunity. Sincerely,
      (Your Name)
  • Send the thank you card as soon as possible, ideally within 24 hours of the interview. You can either send the card in the mail or hand-deliver it to the reception desk where you interviewed.

To bring these tips together, take a few moments to view this video:

This small acknowledgement will take you very far in the interview process. It will help the hiring manager remember you and serve as a reminder to your professionalism.

Readers: What have you done in the past to make an impression on a potential employer?

Best of luck,

Anita

Have a question you would like to ask? Visit http://anitaclew.com/ask-anita/.

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Achieving the Annual Raise

Hi, Anita:

I am just about to hit my second year mark with my employer and I think I deserve a pay raise. I have performed exceptionally well and taken on other roles and responsibilities in my department. How would you suggest that I go about asking for a pay raise at my annual review?

Dear, Ready for a Raise:

Congratulations on your two-year anniversary! From the sound of things, your employer is probably very happy to have brought you on board. Now that you have shined in your current role and offered to assist in different capacities, you most certainly should open the floor up for salary negotiations. As the old sayings go, “it doesn’t hurt to ask” and “you never know you can’t until you try.”  Here are some things to keep in mind when asking for a raise.

  • Make sure your timing is right. It is typically appropriate to ask for a raise after you have been at the company for at least a year. If you ask before this time, it may be premature and come off as pushy.
  • Show your commitment to your job and the company day in and day out. Your manager will be impressed by your tenacity and loyalty to the team. This means… Show up on time each day. Don’t sneak an extra 15 minutes into your lunch hour. Don’t spend your time on Facebook or texting with your girlfriend during the work day. Don’t make jokes about how much you’d rather be in bed than at work. Even if you only do these things every now and then, your manager will notice and take it as a lack of commitment.
  • Bring a list of projects or activities in which you had significant involvement to present to your manager. You want to show how valuable you are to your team and why you should be receiving increased compensation for your efforts.
  • Similarly, bring a list of goals that you have accomplished and a list of those you wish to achieve in the future with the company.
  • Do your research beforehand by looking at comparable positions in your area on sites like Payscale. You will go in knowing whether or not you are being low-balled or asking for far too much compensation.
  • Come to your raise discussion with a goal salary in mind. If you have a number in your head, you will be more confident and set on achieving that rate.
  • Be direct with your raise request. Do not beg for a raise or ask your manager if you deserve one. Be confident and proud of your accomplishments that have spurred you toward having this discussion.

These points will help you get off to a great start during your pay negotiations. With concrete proof of performance and confidence, a raise is more likely to come your way.

Check out this clip for a few tips on getting the raise you want:

Readers, what tactics have you used to ask for a raise? How nervous were you to bring up the subject on a scale from 1-10 (10 being “pulling your hair out” nervous)?

Have a question you would like to ask? Visit http://anitaclew.com/ask-anita/.

Warm Wishes,

Anita

Job Seeking Spare Time

A reader writes:

Hi Anita,

I have been unemployed for 2 months and try as I may, I still am having trouble finding employment. I am starting to get extremely bored and the excess hours of the day are beginning to get to me. With the large amount of free time on my hands, what can I do to during the day that will have a positive impact on my job search and my day-to-day life?

Dear, Stuck With Too Much Spare Time,

Job HuntingBeing unemployed and having nothing to do are not as much fun as many people make it out to be. I bet for the first week or two, it feels like a nice vacation full of sleeping in, leisurely breakfasts, watching television all day, and kicking up your feet. But after a short while, those things you wished you could do while you were working are becoming unbearable and boring. If you are starting to feel down about yourself or feeling like there is no light at the end of the tunnel, I ask you to turn that frown upside down. It is time to start being proactive and getting your life back on track.

The first thing you need to do is set a schedule out for yourself. No more sleeping in until noon and watching television until the wee hours of the morning. Most people who are employed are up and out the door in time to be at work by 8 a.m. Now that you do not have a job, what do you think your full-time position is? You guessed it, JOB HUNTING! Immediately, go see my friends at Select Staffing and fill out an application. Chances are they will be able to enter you in their database and offer you advice on how to proceed with your search. You must dedicate at least 6 hours a day to searching for a job. That doesn’t mean just scouring the Internet; get out there and sell yourself. For tips and tricks on becoming a very successful networker, check out my post Networking Know-How.

Try to find a class in your area that will build your résumé and your skills. If you work in a warehouse, look into getting your certification in forklift driving. If you are in administrative or executive support, brush up your grammar and proofreading skills. Do something that will benefit you in the long run and help keep your brain from turning to mush.

Build your résumé while doing something good for others. Locate a charity whose cause is near and dear to your heart and start volunteering. This will give you satisfaction and look great to potential employers. Here you can gain Community Serviceprofessional and life skills, meet people that could help introduce you to new job openings, and also earn a great recommendation from your supervisor that can only shed a better light on your unemployment. I once volunteered at a local charity and after a few months of dedicated service, I was offered a paid position in their Career Center.

Surround yourself with positive EMPLOYED people. This is a very important piece of advice to follow. Typically, people who are unemployed will not be happy with their situations and will inevitably bring you down. They will be more likely to engage you in activities that do not mesh well with job hunting activities. People with jobs will be able to share advice and connect with other professionals, possibly resulting in your next job lead.

Cut out the junk food and take some time to get your body moving. Exercise is a great way to spend an hour of your day. Getting your blood pumping will increase your energy level and spread those happy endorphins through your body. It is proven to relieve stress and ward off depression. Healthy foods will give you more energy and make you feel much better, both physically and mentally. Remember if you put good in, you will get good out.

As tempting as it maybe, try to avoid reading the bad news about the job market and the economy; it will only bring you down. Switch over to reading uplifting books and inspiring stories to keep you in a chipper mood. Go by yourself to see movies that bring a smile to your face. It actually gives you a greater sense of independence. I definitely suggest you give it a try.

Set GoalsSet daily and weekly goals for yourself. These do not need to be huge or intricate. Day one can be as simple as waking up at 8 a.m. and apply to 3 viable jobs. If you do that every day for a week, you have 15 job applications and résumés out in the world. Now that is an accomplishment! As you achieve more, you will begin to feel better and more confident in your abilities. Just remember you won’t get anywhere without putting one foot in front of the other.

Now that I have given a few tips, I want to hear from my readers what they find to be the most important advice for keeping your sanity while seeking employment. What things did you do while you were searching for a job?

Take care until next time,

Anita

Money for Mileage

A reader writes…

Hi Anita,

I have recently been promoted at my job and the new position requires that I spend quite a bit of time on the road. I need some help understanding the proper procedures and in-and-outs of mileage reimbursements and hoping you can help. Thanks, Anita!

Dear On-the-Move,

What great news! I love hearing about success stories. Congratulations on the promotion. Many companies have moved away from providing company cars to their traveling employees due to budget cuts and insurance/liability issues. More often than not, employees are asked to use their personal vehicles for on-the-job transportation and in return receive monetary compensation per mile driven or are given a car allowance for renting vehicles.

Each company has the choice to reimburse mileage expenses. There is currently no government mandate that requires what a company reimburses employees per mile. The reimbursement is not only intended to cover the cost of fuel, but also
wear and tear on your vehicle, tires, or engine parts. As a general standard, the Internal Revenue Services has issued a guideline payment for the following businesses:

  • 55.5 cents per mile for business miles driven
  • 23 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The next question I often get is where to start calculating the miles driven. I always start from the location of your office. This would exclude any mileage driven on a typical work day to and from your job. If, for example, you are scheduled to travel on a sales call that is 30 miles away from your home but 25 from your office, you will clock the distance traveled from work to the final destination and back. On the other hand, if the site is 5 miles from your house and 35 from your work then you will still start at the office. It is a general rule of thumb that I follow personally.Money for Mileage

To make sure you have enough money set aside for maintenance and unexpected automotive expenses, I would deposit the money that you receive from your company into a savings account. Let’s say it is $4.00 a gallon for gasoline and your car gets 20 miles to the gallon on average. This means roughly you will be spending about 20 cents per mile on fuel, leaving you 35.5 cents to cover maintenance costs for your vehicle (assuming your company follows the IRS standard).  Do yourself a big favor and put about 70% of your reimbursement into savings. Trust me, you will be thankful you have it someday.

I know we are all trying to save some money at the pump these days. I found a great video with some tips to improving your gas mileage and keeping more money in your pockets. See below!

What are your thoughts on personal vehicle use for business purposes? What are the policies of the companies you work for?

Have a question you would like to ask? Visit http://anitaclew.com/ask-anita/.

Looking forward to your input,
Anita

OK to Ask for a Raise?

A reader writes…

Dear, Anita,

Now that we’re supposedly out of the recession, do you think it’s appropriate to ask for a raise?

 

Dear, “Raise Requestor,”

True, economists are saying we have likely dodged a recession… but only by the skin of our chin. By no means are we (as a country) in the clear just yet. Many businesses continue to have hiring freezes, and others are not in a position to offer raises and/or promotions at this time.

Now, I already know what many of my readers are probably thinking. They’re mortified by your question since a “raise” is the last thing on their wish list. A simple income would be nice, right guys?

But let’s get back to the question at hand…

I suppose it all depends on the circumstances. If your company is currently struggling, or things are looking rocky in your industry overall – then now may not be the best time to ask. Likewise, if you’ve only been employed for a few months or you’re a poor performer with your hand out – then my answer remains the same, “No. Not a good time to ask.”

On the flip side, if you’ve done your research, you know your organization is somewhat financially stable… and you are a top performer deserving a pay increase, then I say, go for it!

  1. Make sure you know your market value and your company’s position before popping the question.
  2. Next, prepare to sell yourself. Write down your accomplishments, additional responsibilities, basically anything and everything that would warrant a pay increase. You need to be prepared to back up your request and show proof of why you are deserving.
  3. Finally, be prepared for disappointment. Despite your research, planning, and hard work, the answer may still be “no.” If that’s the case, work out a plan with your supervisor where you may revisit the subject 6 months down the line. Continue to track your progress and productivity and hold tight. If anything, you’ve planted the seed and things may change for the better – sooner than later!

Readers, how many of you recently asked for a raise? Did you get it? If so, what was YOUR approach?

Anita

Annual Reviews and Raises?

A reader writes…

Dear, Anita,
Is it normal for companies to conduct employee performance reviews and offer annual pay increases? If so, how are things looking for 2012?

Dear, “Financial Forecast,”

I remember, back in the day, when employee performance reviews and pay increases were a routine “event” each year. Managers would set a date to either meet in the conference room (or even go out to lunch) and go through a thorough evaluation of the work ethic, productivity, attitude, responsiveness – you name it, the review covered it – of each individual employee within his or her department. At the end of each review, the moment of truth would arrive… the pay increase! Back then, a top performer could expect an annual increase of 7% -10% (if not more). Anyone receiving a 5% increase or less was walking the fine line of termination.

Times certainly changed! By around 2001, annual percentages decreased significantly, and a 5% pay increase was considered “top notch!”

With the economic downfall over the past several years, companies have either done away with annual increases altogether, or they have turned to a pay-for-performance approach in which increases and incentives are focused on high-performing employees only.

Now, it doesn’t take a financial expert to realize that today’s economic recovery has not picked up enough to significantly raise salary budgets to the levels they were back in the heyday.

However, according to information I found on the Society for Human Resource Management (SHRM) site, base salaries in 2012 are expected to increase on average:

  • 0.7% for “low performers”
  • 2.7% for “middle performers”
  • 4.0% for high performers

According to a compensation practice leader at WorldatWork, “The situation where significant numbers of employees are not receiving any pay increases appears to be over for now.”

In my opinion, an annual increase (at least to keep up with the cost of living) should be implemented across the board. It may be wishful thinking, but since the price of everything else seems to go up without a problem… why shouldn’t this?

What do YOU think?
Post your comments here!

Anita

Top Paying Jobs for the Class of 2011

A reader writes….

Hi Anita,

I am graduating from college in a couple of weeks with a degree in Computer Science.  While I know it’s a little “late” to switch majors, I was wondering what type of pay range I may be able to anticipate with this background.  Any input?

Dear “Bill Gates,” (he he!)

Since so many people will be graduating from college in just a few weeks, I thought it would be helpful to share an article I found from my friends at CareerBuilder that addresses the “Top Paying Jobs for the Class of 2011.”  While pay scales will definitely vary (depending on the size of the business, the scope of the job, location, skill requirements, etc), it looks like you’ll have a lot of potential with a degree in Computer Science! 

For those of you (like me) who stayed away from computers or science labs –and never stepped foot in an engineering class…  there’s still hope for decent wages!  Take a look at CareerBuilder’s list, and then be sure to review some of my previous blog posts for handy interview and résumé tips to help along the way!  http://www.careerbuilder.com/Article/CB-2288-Job-Info-Trends-Top-paying-jobs-for-the-class-of-2011/

Congratulations Grads!
Anita

Listing Pay Rates on Job Applications

A reader writes…

Why do so few job listings show a dollar amount for the pay and show instead DOE? On the apps they ask for a pay expectation in dollar amounts, I can’t respond with DOE. I don’t want to apply for jobs where the income is below my expectations; it wastes my time and the employer’s. I also don’t want to tip my hand and show a lower expected salary on the app to get the job. What do you suggest?
Dear “Kenny Rogers,”

I can’t help it, but when I read your question, all I can hear in my head is the classic 1970s song, “The Gambler” – “You got to know when to hold ‘em, know when to fold ‘em…”

The fact is, companies hesitate to state actual pay rates in job descriptions just like you, as an applicant, want to refrain from listing your expected pay rate in the application.  It’s a complete NUMBERS GAME – a “gamble.” 

Neither party (meaning, you or the company) wants to be the first to reveal dollar amounts.  For job seekers (as you’ve noted in your question), you don’t want to sell yourself short by listing a low rate.  On the other hand, if you state a high salary expectation, you may scare the employer away and miss a perfectly good opportunity.

Believe it or not, companies posting jobs with “DOE” are going through the same thought process.  They don’t want to state a set pay rate (or even pay scale) because they truly may be open to paying a higher amount for qualified candidates that meet or exceed their expectations.  In contrast, they may not be willing to pay the same amount for someone more entry level… but who could still do a good job.

I hate to say it, but these days, it’s definitely an employer’s market.  With so many people looking for work, businesses have the upper hand.  They don’t necessarily have to reveal anything about the pay because they know they’ll still be able to attract plenty of interested candidates.

That means you, as the job seeker, need to be the first to step up to the plate and reveal your “cards” (I’m going back to the Kenny Rogers reference here!)

Here’s a suggestion on how you can do this:

 

Utilize your cover letter to address the “pay” issue:

 

Within your cover letter, you can mention that your “expected salary” is what you believe is your market value.  But here’s the key so that you don’t seem inflexible… you should acknowledge the fact that you may not have a complete understanding of all of the functions of the job (which may be valued at a different pay scale). 

To go further, I suggest that you state in your cover letter that you recognize there are various forms of compensation (benefits, exciting company culture, etc.) that may make up for a lower pay level.  Express that you are open to considering these items.  Remember folks, “total comp” can include bonuses, benefits, 401(k) packages, etc. — and is not limited to a base pay rate.

So, before you “know when to walk away… or know when to run,” go along with the game and list your rate.  As the economy improves, things will change, and it will go back to being an employee’s market where YOU will have the upper hand.  Until then, I hope this advice helps!

Hey readers, as fellow job seekers, I’d love to hear your thoughts on this.  What have you done in this situation? 

Managers / Supervisors – I’d love to hear from you too!  Do you agree with me on this one?

Look forward to your comments!
Anita

Truth About Salary

A reader writes…

Is it ok to lie about salary when looking for a job?

Dear “Pinocchio,”

Don’t you remember anything your grandmother taught you? Lying is never a good idea. Well, okay – an occasional white lie may not get you into too much trouble, but when it comes to looking for a job and establishing an honest working relationship, I say… keep it real. After all, it’s not difficult for the company to verify if what you say is true (through reference checks or simply requesting to see your W-2), and if he/she finds out you lied, that could be the nail in your interview coffin, so to speak.

Take a gander at an article that was provided by my friends at CareerBuilder and posted on CNN. I think you’ll find some good insight!

http://www.cnn.com/2010/LIVING/09/15/cb.embellish.salary.history/index.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fcnn_living+%28RSS%3A+Living%29

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Disclaimer

Anita Clew's blog posts are intended for general guidance and should never be taken as legal advice. In all instances where harassment, inequity, or unfair treatment is believed to be present, please consult your HR Department or legal representation.
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