Questions about competitive pay

[CarbideBob]

One has to pay the market.
The question you need an answer to is what are your competitors paying and what bennies?
The second question is how do you not know these numbers?
One could start with looking at Indeed and offers there but it is better to know people doing this type of work and just asking them.
How much are you making and how much would it take to steal you away from the current job?
Paid vacation time, how many weeks? Fully covered health insurance on a good plan? 401 match and limits? ....To some this matters to others it means nothing.
Bob

 

[jaguar36]

Seems like you've got multiple questions wrapped up here. Your actual question of a job title, I think the answer is no, at least not that would give you any meaningful salary info.

Implied question of if your guys are being payed competitively, the answer is probably not. Salaries on job offers have skyrocketed in the last year, and most folks could probably get a good bump by switching jobs now. Even ignoring recent increases, it seems like your team is probably underpaid as well, but if they are happy and have been there for a long time they are unlikely to leave even if they are a bit underpaid.

For hiring, it sounds like you want an engineer who can do manual machining, run and program a CNC Mill, Lathe, and waterjet, is personable, has good communication skills, and can weld. That's just not going to happen. Heck even finding someone with two of those skills would be a challenge. You'd be better off figuring out where your greatest deficiency is now, and hiring someone who is really good at that and seems to have an interest in the other stuff. Then you can pay them appropriately for that specific title, be it Salesman, Machinist, Engineer, or whatever.

 

[michiganbuck]

qt jaguar38: be it Salesman, Machinist, Engineer, or whatever.


Should be... Salesman, Machinist, Engineer, and whatever.

 

[adammil1]

These days it is better to pay health insurance then salary since it comes out before taxes. Company provided work shoes, clothes, safety gear same deal. Problem is most younger workers focus on pay rate not take home.
Bill D

On the other hand if one's spouse works for the government, a hospital, or a huge employer and gets a far better plan he's going to want more pay and could care less about your benefit plan.

It really seems pretty silly that in a family with 2 people working full time one employer gets screwed and the other wins big.

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[Nano Vujkovic]

On the other hand if one's spouse works for the government, a hospital, or a huge employer and gets a far better plan he's going to want more pay and could care less about your benefit plan.

It really seems pretty silly that in a family with 2 people working full time one employer gets screwed and the other wins big.

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Universal healthcare!!!

 

[hanermo]

1. Yes!
That´s what they Really Really want.

2.
Of course it will happen, and easily.
Tesla, SpaceX, Google prototypes, Apple prototypes, hire these kinds of guys by the dozen every year.

3.
Calibrate your pay.
A good guy of spec 1. will cost 100k-150k + bennies and be easily worth it.

Most should be offered some form of profit share, as this will easily pay back the company their total cost, from the first 6 months onward.

I am one of those people.
Endless people on this list are also one of those people.
Shop owners or managers or all-rounders who have run large complex projects or shops semi independently.

Example, anecdote:
I am training a very smart guy, right now, who will become one of those people within 6 months.
He is on salary, and I expect to pay him 2-3x more per month within 6-12 months.
Somewhere around 60k€ == 80k-100k€ and up..

I told him, as soon as You can do this independently, you will be making me 5x your salary, whatever it is later.

? .. Why on earth would I pay You less, and make less, and lose my big investment in the training ??
You could always go next door if I don´t pay a suitable wage, at least.

(A very skilled guy, professional, 18 years experience in the trades, just needs machinist experience and cad/cam / programming. Good welder and great fab. I can teach the machinist and cadcam in my sleep).

My expectation is to make more than 500k net profit per year from his work, while paying him 100k€ + bennies.
His value and salary more than doubles from best-before -- and we both make out really well.
I will be giving stock or options or similar as well 8 months out.
Why would I not ?
We both make out really well.

Good workers are very valuable.
Smart managers may/can make them really profitable.
The manager should/must make them profitable -- not low-cost.
High-cost is vastly more profitable for the enterprise.
At 5x net profit the cost, a higher-cost employer is much better than a lower-cost one.
And much more motivated, eager, honest, easier to work with.

For now, we both work 12 hour days, for peanuts, relatively.
Work, fab, learn, and training.
My risk is losing 6 months of extra hard work from me if he walks out.
While getting extra hard work and fab stuff from him.
Fair enough.

1.
For hiring, it sounds like you want an engineer who can do manual machining, run and program a CNC Mill, Lathe, and waterjet, is personable, has good communication skills, and can weld.

2.
That's just not going to happen.

3.
Heck even finding someone with two of those skills would be a challenge.

 

[Fancuku]

For hiring, it sounds like you want an engineer who can do manual machining, run and program a CNC Mill, Lathe, and waterjet, is personable, has good communication skills, and can weld. That's just not going to happen. Heck even finding someone with two of those skills would be a challenge.

I agree. The person they are looking for does not exist. And even if it did exist, their price would command 6 figures.

OP and his coworkers may do all those things but it has taken them decades to get there and were in the same shop since the beginning. That is a very unique situtation.

 

[onefastpony]

Employee compensation is one of the largest costs in any company. Compensation philosophy and standards are set by executive management in alignment with the company’s strategy and objectives. HR organizations in large companies will be charged with knowing how total compensation aligns with the job markets the company is participating in. They will use methodologies and databases provided by compensation consultants like Towers Watson, Mercer, Korn Ferry, etc. In general, they will follow established guidelines because executive management will easily accept their conclusions.

HR is caught in the middle when labor markets tighten. They told their management what labor should cost. The pressure builds when they cannot fill positions at the budgeted rates. They will reach out for justifications explaining why they should pay more but they will need to align the feedback with some objective standard.

Tacking on labels or titles will not help unless there is an objective standard to justify it. In my previous experience, I would have labeled your role as a “technician” or “technologist” depending on whether the role met the criteria for an hourly or salary position. Engineer generally won’t fly unless the person meets the educational requirements. Approximate wages for these categories range between $20 and $35 per hour or $45k to $90k for salary. Of course, it will vary based on market and the total cost of the compensation package including benefits offered.

Wage compression always starts in the entry positions. Companies are always tempted to pay a little more to fill a critical position. Trouble is, all the existing folks rightfully expect the same consideration for their contribution. A little leak quickly becomes a flood. Management will demand that HR must hold the line.

There is one more important point that good management knows — competitive compensation is essential but people quit their boss before they quit for pay. Leaders are often given new ‘opportunities’ when their group is tagged as a hot spot where turnover is troubling.

It sounds like you are already well compensated and whining about it because you think your group is special and could make more. I say, go try.

LOL, we do alright compared to the shops in town that only run production jobs. I don't know anyone outside of our shop that does anything close to what we do. I've lost touch with most of my class from trade school and the shops I have worked in either closed or moved. That is why I asked on this forum. I've inquired with a couple instructors and have a fresh out of machine tool technology program starting range of 27-32 for this area. Between that and the information I've received on here I can start the conversation.

We currently have the job title "mechanical engineering technician". You are right on with the "technician" title.

At this point everyone above me has moved to working from home. I'm the one looking into this as I am going to be the one working hand in hand with whomever we hire. That is why I want to be sure we are offering a competitive wage to get a good new hire. I know money isn't everything, but it seems to be the first thing young people look at when job searching.

It could come across that I'm whining. There are things I am frustrated with since we moved most of our department to working form home. It has put a lot on me that wasn't there before. That is why I'm the one inquiring about pay for the new posting. I want to get the best possible person in here to keep things rolling smoothly around here. A good employee can make a huge difference in a shop this small.

 

[EndlessWaltz]

I agree. The person they are looking for does not exist. And even if it did exist, their price would command 6 figures.

OP and his coworkers may do all those things but it has taken them decades to get there and were in the same shop since the beginning. That is a very unique situtation.

Mid thirties, can weld ok if it is a rush fix tractor job.
Can CAD/CAM
Can manually machine
CNC program at control as well using G code lathe
Ran everything from routers, mills, and lathes.
Dont drink, dont smoke and show up on time


Um, just realized I ain't making what I should ...be right back

 

[JS]

Partial quote........

can weld ok
Can CAD/CAM
Can manually machine
CNC program at control as well using G code lathe
Ran everything from routers, mills, and lathes.
Dont drink, dont smoke and show up on time


Um, just realized I ain't making what I should ...be right back

I think, I'm in the same boat........

 

[Kalispel]

LOL,

It could come across that I'm whining. There are things I am frustrated with since we moved most of our department to working form home. It has put a lot on me that wasn't there before. That is why I'm the one inquiring about pay for the new posting. I want to get the best possible person in here to keep things rolling smoothly around here. A good employee can make a huge difference in a shop this small.

You are absolutely right about the positive difference good people make.

I’m simply explaining how compensation works in a very large company. Without the endless hassle of the HR gauntlet, low and mid-level managers would be far more generous with wages and that would all roll up to a budget disaster. Do not expect it will be rational or fair from your perspective.

There is some security that comes from working in a big company - they can make payroll reliably and one overly ambitious project will not sink them. But, there are also weird risks - some genius on the senior management team might decide machining is cheaper in Bangladesh and move the prototype shop there before anyone realizes or is willing to challenge the dope. Big company HR is faster at eliminating positions than filling them.

I was not kidding or being an ass when I said “go try” - if you are really as good as you say, you should try a smaller environment where you can truly shine.

 

[michiganbuck]

Likely there is a trade-off of what it costs in pay and benefits to keep trained and skilled workers and the cost of training new people... or getting stuck with low producers.
I worked in one shop where a small number of guys were off their job most of the time and the boss liked that because when on the job they cost the company more than not being there.
Good bosses, good conditions, number of other companies and the offers they make.
Some shops have secrets/ work processes they wish to keep under their hat as long as they can, other shops just have common or anybody can do it work.

 

[Bill D]

Local school district is in the paper because with covid many teachers are out for a week at a time in a quarentine leave. They are having a hard time getting enough substitute teachers to fill the empty positions. Administrators have to fill in some times. No mention that they cut susbstitute pay by $75 a day from last years extra covid rates. Maybe they could cut the pay lower to encourage more applicants?
Bill D

 

[onefastpony]

You are absolutely right about the positive difference good people make.

I’m simply explaining how compensation works in a very large company. Without the endless hassle of the HR gauntlet, low and mid-level managers would be far more generous with wages and that would all roll up to a budget disaster. Do not expect it will be rational or fair from your perspective.

There is some security that comes from working in a big company - they can make payroll reliably and one overly ambitious project will not sink them. But, there are also weird risks - some genius on the senior management team might decide machining is cheaper in Bangladesh and move the prototype shop there before anyone realizes or is willing to challenge the dope. Big company HR is faster at eliminating positions than filling them.

I was not kidding or being an ass when I said “go try” - if you are really as good as you say, you should try a smaller environment where you can truly shine.

I appreciate the information and your opinion as well as everything others have been willing to contribute. Everything helps as I've been in this shop for 15 years and this company for 27 total. Years ago I had more contacts in local companies, so I had a better idea of what was going on as far as compensation in this area.

28ish years ago I was the only machinist in a start up company and the only employee that wasn't also invested in the business. My teacher from trade school was invested and contacted me to work there while getting things off the ground. I was the CNC programmer, machine operator, and inspection. It was a lot of fun, but also very long days to get first run parts done and be sure they passed inspection. We had to show we could do the work and supply quality parts. I was offered a position at my current employer that paid more and there was no risk of the company closing the doors if we didn't get the next contract. There is a lot of security with my current job, but you are correct that someone well above me could decide they don't need this service in house any longer and outsource everything. We have seen that happen with other areas here, so it is a concern. I have 2.5 years left before I hit 30 years here. At that point my pension is basically maxed out. It seems like that would be a good time to transition to something else, but there are also a lot of things in the works here that could change my mind between now and then.

Anyway we are way off topic. I think I have enough information for now and have passed it to my management. Hopefully they are able to work with HR to get the starting wage increased to be more competitive. Better yet would be for that change to increase wages across the board for our shop.

Thanks for all the info and opinions!

 

[MCritchley]

A good job title may be "Prototype Machinist" or "Engineering machinist" that will get the good guys to apply and let HR know you and your people are more than a simple job code they can look up in a book.

 

[empower]

I am the lead in a small shop (10 people including myself) that operates within a large business. This means even though we are small the HR department handles pay and there is management above me that I need to work with to get anything outside of our normal day to day operations done. We are going to have an opening soon which doesn't happen often, so I want to be sure we get a good person in here. While discussing this with management the current shortage of skilled labor came up and they want feedback on pay.

Everyone in here can run manual mills and lathes as well as CNC mills and lathes. We all program using MasterCam. We program and run a Flow waterjet. We have a couple universal lasers that are programmed using CorelDraw. We have a Trumpf press brake as well. We TIG, MIG, spot and laser weld. We design as well as fabricate and half the staff are able to use Solidworks. Some have their Solidworks CSWA. Basically there isn't much we don't or can't do. I have been asked if our current compensation is where it should be. I don't know where to start as the staff here do a lot more than your typical machinist. Our HR department works with an outside company to determine our pay. Is there a job description that relates to everything our staff does on a daily basis?

Thanks,
Mark

i'm in charge of an R&D facility where i do all of the above, around 65/hr, mostly because i'm versatile and am able to do just about anything thrown at me.