If you ask any given employee whether he is earning his desired salary, chances are good the answer will be no. At least, that’s what a recent CareerBuilder.ca survey found — 71 per cent of workers reported they don’t yet earn the salary they want.
Men are slightly more likely to be satisfied with their salaries — 31 per cent reported salary satisfaction, compared to 28 per cent of women.
Younger workers are the least likely to be satisfied with their pay — only 22 per cent of workers aged 18 to 34 said they earn their desired salaries, compared to 37 per cent of workers aged 55 and up, found the survey of 431 hiring managers and 422 employees.
But the fact that most people still haven’t attained their desired salary level isn’t a negative thing, according to Mark Bania, managing director for Canada at Career Builder in Toronto.
“I’m happy that the survey came back this way because it shows me that, as Canadians, we’re always striving to that next level and we have very ambitious goals about what we can ultimately make.”
The magic number?
So what is the salary level where most Canadian workers would feel satisfied — and consider themselves “successful?”
“Based on our data and this survey again, it seems like $50,000 is that tipping point,” said Bania.
A 2012 poll by the Marist Institute for Public Opinion in New York also found $50,000 to be the dividing line for employee happiness and satisfaction — the point at which respondents started reporting greater satisfaction.
Those findings are considerably lower than those found in a 2010 study from Princeton University in New Jersey that cited $75,000 as the magic number.
However, after the $75,000 mark, additional income stopped increasing satisfaction.
But the magic number for salary can vary widely depending on different factors, said Bania.
“Although $50,000 seems like the tipping point in our survey, that number can vary extremely wildly depending on the individual and what they value from their career path. Some individuals are very, very heavy on the compensation side; others are very heavy on the culture or some of the non-salary-related portions of their job,” he said.
“There’s a lot of different factors people measure when it comes to success — access to leadership, office space, the different things that come with the profession that they’re in. So, although salary’s important, there’s a lot of different factors around that.”
Not just about salary
Salary is an important driver, but it’s far from the only factor that impacts employee satisfaction and perceptions of success. Base salary has a very nuanced link to job satisfaction, said Sandra McLellan, director of reward, talent and communication at Towers Watson in Toronto, which put out two surveys that highlighted the need for employers to focus on factors around employee experience — not just salary.
“If asked, most people would say they’re not making their desired salary but, if probed, people would say, ‘On the other hand, given that I like my job, given that I like my boss, given that I feel like I can manage my work and life, given that I’m learning new things, (my) base salary is not causing me to think about leaving the company,’” she said. “So, I think, that’s where it’s a bit of a nuance.”
Claudine Kapel, a compensation expert and principal at Kapel and Associates in Toronto, would tend to agree.
“While compensation is the cornerstone of the employment deal, it’s still only part of the retention equation. So organizations that pay attention to other reward elements as well — such as development, career opportunities and the overall work environment — will be better positioned to retain and engage employees,” she said.
It’s particularly important to have that focus for younger workers, who are less likely to have reached the salary level they want, said McLellan.
“You can’t put a generation into one group but what we do hear from younger workers is that they also value other things,” she said, adding that interesting work and a good variety of work are two common requests.
One way to come up with ideas or cues for non-compensation retention tools is to look at social media, said McLellan.
“What are the things that you see create an ‘event’ in social media? Taking on new projects (and) getting certifications, because progression is not just base salary progression,” she said.
“It’s also, if you live in a social media world, the kinds of things that we talk about on social media that created a shared event. And so those kinds of events that happen on LinkedIn become for people a way of measuring their progress.”
Are workers more likely to be satisfied with their salary if they have a good understanding of how it was determined — and how it may increase over time? Career Builder found 43 per cent of workers want their company to openly disclose salaries, while 65 per cent of employers view disclosure as a positive thing.
Just one per cent of employers said they already do salary disclosure.
But there is a caveat, said Bania.
“It’s important for us to really understand what disclosure of salary does mean, however. In my opinion, disclosure of salary is speaking to what a desired job title or job family should be making — not necessarily what the individual sitting across the table from you does make,” he said.
“We know that there are incentive programs, we know there are additional types of compensation for special projects or, if you are a sales individual, for hitting targets… so should employers necessarily disclose what John Smith sitting across the table from you makes? That’s up for debate...
“But should employers be able to say that ‘At our organization, a junior accountant should make between $55,000 and $65,000 dollars’? I absolutely am onboard with that type of disclosure because it helps employees and potential future employees of organizations to truly understand what they’re getting into.”
Many organizations could probably do a better job of communicating around compensation, said Kapel.
“Not sharing any information on compensation programs and how they work can create an environment of distrust. Organizations that want to open up communications around pay can always start by sharing more information about their salary ranges, so employees can see the details of their own salary range, and maybe the next range up, as well as the criteria for earning increases and getting promotions.”
And including context is crucial, said McLellan.
“There is an element that the transparency piece is important, but publishing salaries without context can be just a dissatisfying than not knowing.”
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.