Benefits and Compensation

3 Free Metrics for Comp Managers, Plus a Bonus

The three stats are released by the Bureau of Labor Statistics (BLS), a branch of the U.S. Department of Labor ( The bonus metric is released by The Conference Board, a private, nonprofit research organization.

Average Hourly Earnings

Payroll data. Each month, the BLS collects payroll data from records reported on a voluntary basis to the Bureau and its cooperating state agencies by thousands of organizations. Monthly averages are calculated for nonsupervisory workers in manufacturing, mining, construction, transportation, public utilities, wholesale and retail trade, finance, insurance, real estate, and other services.

These groups account for over 80 percent of the total employment on private nonagricultural payrolls.

The average hourly rate includes all payments that production or nonsupervisory workers receive during the survey period, including premium pay for overtime or shift work, but not including the value of employee benefits, irregular bonuses, and other special payments. This means that the numbers vary according to changes in (1) employee base pay, (2) hours worked, and (3) shifts worked and shift premium rates.

Current earnings/rate of change. This indicator includes the percent increase for selected 12-month periods.

Using Hourly Earnings Data

Hourly earnings are useful as a basic guide to how wages are changing, but they must be used with care. The precise demographic composition of your workforce–especially in terms of skills, education, and experience, not to mention your company’s unique mix of job classifications and working hours—would make a comparison with the “average” employer, to which the government’s figures apply, all but useless. A better source of rates would be a survey of base compensation in your labor market.

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To illustrate how to use the data, if you know that the average hourly rate has risen    1.9 percent in the past 12 months, the CPI has risen 2.7 percent, and wages in your labor market have gone up 3.1 percent since last year’s survey–this gives you a ballpark idea of how much to increase wages.

Of course, it’s only a starting point. You must also consider the organization’s ability to pay, your ability to attract and retain workers with your current wage levels, and how your present rates compare with what others are paying in your labor market.

Unemployment Rate

Each month, the BLS reports on personal interviews conducted with about 60,000 American households selected to be representative of the U.S. population. Based on that sample, the BLS calculates the numbers of employed and unemployed. Here’s how the tabulation is done:

Employed. Those counted as employed include: (1) all civilians who worked for pay any time during the week in which the survey is taken; (2) those who worked unpaid for 15 hours or more in a family-operated enterprise; (3) those who were temporarily absent from their regular jobs because of illness, vacation, industrial dispute, etc.; and (4) members of the armed forces stationed in the United States.

Unemployed. The unemployed include: (1) those who did no work during the survey week but who made a specific effort to look for a job within the preceding 4 weeks, plus (2) those who did no work during the survey week but did not look for work because they were on layoff or waiting to start new jobs within the next 30 days.

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While these figures obviously understate the actual level of joblessness in our country—a person who works just 1 hour during the survey week is counted as employed, while someone who has stopped looking for work in a stagnant labor market is not counted as unemployed—still, they are interesting and useful when considered in relative terms.

For example, they can tell us when a tight labor market is beginning to show signs of loosening and, vice versa, they can reveal cyclical trends in employment that are important to strategic decision making.

In tomorrow’s Advisor, CPI and the Conference Board’s Help Wanted figures, plus an introduction to a handy wage and hour self-audit guide.

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