There is a lot of debate about pay in our country right now, from minimum wage rates to seemingly stalled salaries in various sectors of the economy. It is an issue that creates tension between employees and employers, and it confounds many economists and political leaders. It is also a critical issue in the location selection business, where companies seek to serve new markets while maintaining levels of quality and service at the lowest possible cost.
The baby boomer retirement surge, changing worker attitudes about work/life balance and new business models have made it harder to characterize the true value of wages and benefits. What is clear is that location does matter, to both the employee and the employer.
Pay and its resulting quality of life is also largely a function of location. A recent article in The Atlantic analyzed which metro areas were trending upward and those whose trajectory was stagnating or losing ground. One of their maps caught my eye:
Percentage increase for high-wage jobs, 2009-2013
Employers should know how their location impacts their ability to recruit and retain the best talent. For example, this graph shows that while standard average wage comparisons emphasize cost, the percentiles focus on value. In this example, an $80,000 annual salary gets you a software developer in the top 74th percentile in Columbus but only in the 24th percentile in Silicon Valley. Across many industries, higher quality talent is available at a greater value to employers in the Columbus Region.
Percentile in salary range for software developer earning $80,000 per year in…
I suspect wages and benefits will remain a hot topic at the dinner table and in the boardroom for decades to come. It can be complex for employers to makes apples to apples comparisons when evaluating locations, and even more difficult for employees to make the right decisions about where to place their future.
I would hope more and more talented people and innovative companies continue to choose the Columbus Region to live, work and play. Companies here find themselves in a unique position, able to employ top talent at a competitive cost. Meanwhile, talented people find interesting opportunities, favorable compensation and a dynamic community that remains on a positive path forward.
One Columbus Update
- Thank you to One Columbus investors and our panel of experts from IBM, Nationwide and The Ohio State University who joined us for a discussion about big data last week at COSI. You can read more about the event here.
- Next week, our team heads to California to meet with companies and consultants.