Ups and Downs of Wages

Richard Jasper doesn't need this summer's MidAtlantic Employers' Association salary survey to tell him that salaries in science and technology fields are rising.

Jasper, the founder and chief executive officer of Compliance Management International, an environmental engineering firm in Montgomeryville, can see it in his payroll.

"The salaries have gone up exponentially," said Jasper, who had to pay through the nose to attract four qualified engineers. "In the last year to year and a half, they've gone up 20 percent."

The survey, released to participants earlier this summer, found that science and engineering jobs had the biggest increases - about 4.4 percent on average. Other categories - production, administration and information technology - were more scattered.

That's like the economy, said James Devine, president of the Valley Forge association of small and midsize businesses in the Philadelphia area.

"The economy seems very strange - there are areas where it seems very healthy and areas where it seems shaky," he said.

"It seems like this is a year of change," he said. "I think hiring is selective. In some cases, [employers] are having a hard time filling the jobs, because finding specialized talent is an issue for them."

Jasper, whose firm consults with companies on environmental and health and safety issues, said he wanted to add six engineers and health and safety professionals to his 30-person staff.

So far, he has hired four.

"There is a shortage of good engineers out there," he said. "It's been very difficult."

Not only are negotiations tough with candidates, they are even tough with the outside recruiters who are paid to find them, he said.

"If a recruiter finds a good candidate, we'll hire him even if we don't have a position open," said Jasper, who wants to add six next year.

He also worries about retention. To keep his technical staff happy, he handed out 15 percent raises, doubled the company's contribution to a 401(k) program, and liberalized time off.

In a competitive labor market, salary surveys abound.

WorldatWork, a national human-resources association that focuses on compensation practices, just published its annual survey of human-resource managers' plans for raises for next year.

"Philadelphia is right on the mark in comparison to the national average," said practice leader Alison Avalos, from the association's Arizona headquarters. Companies in Philadelphia tended to hand out raises of 3.8 percent in 2007, and plan 3.9 percent raises for 2008.

The survey does not look at pay for specific jobs, but asks companies about their budgets for raises.

"In 2002, there was a significant decline in the size of the growth of salary budgets," she said. "In 2003 and 2004, they hit an all-time low. What we have seen is in the past three years, that figure is up by a tenth of a percent."

She said companies are putting greater emphasis on merit increases. "Employers are realizing that the high performers expect to be rewarded, but it's not money well-spent if you are giving the same to someone who is not helping the company to achieve its goals."

Companies are also increasingly looking at other ways to reward workers. "They don't need to keep throwing money at these people," Avalos said.

"The term benefits is used much more loosely," she said. Popular options include flex time and telecommuting.

Devine said another MidAtlantic Employers' Association survey shows the same trend - particularly with pay raises tied to performance.

"Production levels are leveling off and labor costs are continuing up, so companies are trying to gain some leverage," he said. "You have to put in some trigger that will increase production."

While other salary surveys measure large national companies, Devine's survey draws on the experience of small and medium-size companies in the Philadelphia and South Jersey region.

Here are some results:

Most startling was a slippage in information technology hiring. The IT field took a pounding after a flurry of Y2K hiring, the dot.com bust, and a move to outsourcing, but began to gain traction in the last year or two. That momentum has stalled, according to the survey, with 1.7 percent fewer jobs and pay raises of about 2.9 percent, less than the 6 percent raises handed out a year ago.

Hiring was down in manufacturing, but pay rose 2.5 percent, more than the 0.5 percent increase from 2005 to 2006. Lower-level welders saw big hikes, up 22 percent, as did midlevel machinists, up 20 percent to $18.14 an hour. Novice machine tool operators lost ground, with pay declining nearly 25 percent to $10.78 an hour.

Overall, the biggest raises went to scientific and technical employees. Engineers, chemists, designers, lab techs, and quality-control workers generally netted raises of 4.4 percent.

Among managers and supervisors, pay for 2007 rose 2.6 percent, less than the 4.3 percent raises managers and supervisors brought home in 2006. Frontline plant supervisors took the biggest hit, a drop of 7.2 percent in pay. Regulatory-affairs managers were among the gainers, adding 18 percent to earn $75,731 a year.

Premier Products Co., a Plymouth Meeting dental- and medical-equipment manufacturer and supplier with 130 employees, already had a regulatory-affairs manager. This year, he gained an assistant, doubling the department.

"More people are trying to sell globally," and each country has its own complex set of rules, said Karen Giannone, Premier's human-resource manager. "You have to have all your regulations in order."