Shawnee Love •
August 3, 2018
When deciding how to pay, I generally say that you have to ensure your pay practices enable you to meet your business goals. They also must be reasonably fair for your industry and geography. However, if you need to recruit people from outside of your local area, it can have a great deal of impact on your compensation practices. I.e., you will need to align or at least make adjustments to attract candidates from the locations and industries you are trying to pull from.
Being based in the Okanagan is interesting, because employers often cite the “sunshine tax” to defend paying low wages. In fact, their wages are anywhere from 15-30% less than what people could make in an equivalent position anywhere else in Canada. To be clear, there is no tax. It is merely acknowledgement of past behaviour where people were willing to relocate from more lucrative cities to work and live in the Okanagan for lower wages. These lower wages were bearable when the cost of living was low, but the last few years have seen significant increases to costs. The housing market has inflated, rental places are few and far between, gas prices are outrageous, and guests to my house have noted that local produce and grocery store prices are higher than their home markets. In that situation, it isn’t easy to convince someone to leave a good paying job in the city to come to our small city.
Local organizations that complain about the difficulty finding good employees should closely look at their wages and consider whether getting rid of the sunshine tax might enable them to attract an A player from elsewhere or even attract an A player locally.
Clearly pay isn’t the only factor people consider when moving to a smaller community. They also look at,
- Commute times,
- Availability of activities, schools, and amenities,
- Affordability of housing,
- Family, etc.
But if the pay isn’t where it needs to be, companies won’t attract the stars they want. At least not in a candidate’s market like we are experiencing now.
If you are uncertain whether its compensation that is holding back your hiring, consider a market assessment. Just make sure you choose the market where you are recruiting from to compare against.