Market Research - Your Salary

On Monday, I began to talk about how to negotiate a better salary for yourself.  It started with a look at your companies compensation philosophy in general and then a bit about considering your performance at work.  Today, I'm going to write about market data.

Before you can conduct your search, you have to know your job title.  This is obvious right?  Well, maybe not so much.  Some companies like to make up job titles because their company is so 'unique' which doesn't help when you need to use industry job titles in order to do your research.  I would suggest that you spend a bit of time on Google, to get two or three different ways to describe your job (if you don't already know) - so that you can look up each job title.

The next thing you need to know is the typical education, and years of experience someone would need in order to get your job.  This isn't your current education and experience, but what someone external to the organisation might need in order to qualify.  Most of the salary databases/resources you use will provide a job description that include these details - this will help you narrow down your search.

I'm going to stick with using Jordan as my example.  He is called a Repair Dispatch Manager - which after a quick Google search will tell you employer's do use from time to time but enter that title into a salary survey database and you won't have much luck finding it.

The job titles I found that describe what he does include:

• Fleet Maintenance Supervisor
• Fleet Supervisor
• Warehouse Supervisor
• Transportation/Logistic Supervisor
• Dispatcher Sr./Manager
• Equipment Coordinator
• Maintenance Planner
• Dispatcher

Okay, so I'm a bit ridiculous - that is a lot of titles, and you probably don't need that many but I like to be thorough so I used each and every one.  As you enter the job title into each online salary resource, you'll find that not every resources has every job (another reason why it's good to use multiple titles and multiple salary resources/databases).

The job descriptions for each of these titles was similar, as was the years of experience and credentials - and he does a bit from each of these jobs - but no single one matches his profile exactly.  So collecting data from each source is going to help us get an accurate picture of a reasonable salary for him.

There are a lot of free sources of data you can explore online - these are some Canadian resources that I like.

• http://www.payscale.com/
• http://monsterca.salary.com/CanadaSalaryWizard/LayoutScripts/Swzl_NewSearch.aspx
• http://www.salaryexpert.com/
• http://alis.alberta.ca/wageinfo/Content/RequestAction.asp?format=html&aspAction=GetWageHomePage&Page=Home
• http://www.hays.ca/salaryguide/index.htm

In the coming days, I'll share with you my summary of Jordan's salary data and what (if any) raise, I think he should ask for this year.

Salary Negotiations

Over the weekend I shared with you my good news, the raise and new position I recently achieved.  Today I thought I'd share a little bit about the compensation philosophy in general, and how to negotiate a salary increase for yourself.  I'm going to use Jordan as an example over the next few days as we look at this subject.

A company's compensation philosophy is their plan for how employees will be paid.  It often includes a matrix for base pay, how the  matrix is determined and what factors are involved when considering adjusting an employees rate of pay.  They may include bonuses and benefits - but more often than not, a compensation philosophy is a part of a bigger, total compensation strategy.  Things like profitability, market competitiveness, industry and size all play a part in a company's pay strategy.

Jordan's company does not have a set salary review process/timeline that is actively communicated to it's employees.  He knows that his performance is reviewed in the early summer (usually June), but a review of his pay is not a guarantee.  We learned his first year with them, that it's his job to approach his manager about a request for an increase in pay, and be able to be very clear about why he thinks that's what he should earn.

It's not transparent, and it's difficult - but over the years (and my HR background), we've developed strategies that garner increases in pay for Jordan year after year.  None of these conversation tools would work, if he wasn't excellent at his job, always seeking out increased responsibilities and being an asset of his workplace.

To have a conversation about your salary with your manager, you first need to have a really clear picture about your performance.  I don't mean what you tell your buddies, or your mom - I mean you have to know if you would give you a raise.  If you are a top performer or an under performer.  If you really don't know, I would guess your the latter - or just really not self-aware.  Consider asking yourself the following questions to gauge yourself:

• Do you show up to work on time?
• Do you ever disappoint your colleagues or your supervisor?  Even if they don't tell you, you can see it on their faces.
• Do you have to be asked to complete the same task, or for a status update on a task, over and over again?
• Do you get regular praise for a job well done?  If you don't, either your not telling people what you do well, or not doing things well - either that or you have a crappy boss which is a whole different topic.
• Do you enjoy what you do?  If you don't, I would bet that others know it.
• Since your last performance review, did you take the feedback you were given and actively work to improve?

This list is certainly not exhaustive, but it may help you align your thoughts around your own performance.

Once you have a sense of your performance, you must do some market research - don't count on your management team to tell you the going rate for your job in the industry.  This is usually the part that people struggle with the most - they have no idea what they should be paid, just a desire to be paid more.  Well I'm afraid folks, that a desire is not enough - you must have facts.

When doing this type of research, you must remember your particular skill set, experience, education and credentials - not too mention industry.  All of these factors weigh in on your  marketability.

In the coming days, I'll continue with some market research sources and some of the data I've come up with for Jordan.

Jessie Got a Raise (and a new job!)

http://www.risesmart.com/blog

I can’t believe it’s been two weeks and I haven’t told you my good news yet, I recently got a raise (technically two), and a new job!

Every April, my company goes through a salary review process where every single employee has their performance reviewed, and a determination is made if their salary will be adjusted. Our salaries have two parts – one, it must align with our market competitive salary bands, and two, there are adjustments made due to performance.

My salary (previously $63,000), was within the range, however; it was on the lower end of the scale. I could talk for hours about compensation philosophy as for those of you that don’t know, I am in the Human Resources profession – but I’ll spare you all of the details. My supervisor brought me up to $66,969 (a 6.3% increase) which was much closer to where I thought I should be in the band – but I had actually requested to be at $67,500 which is what I thought would be a reasonable market competitive salary for my position. Don’t get me wrong, it was a fair salary increase however; it was still short of market competitiveness considering my education, credentials, experience and performance.

Much to my delight, within the same week as that salary increase, I was offered an internal transfer from a local team, to a Global team. I’ll be working my old Manger and a few other folks that had joined this global group a year and a half ago and there are a few new faces too, which will be a fun challenge as we learn to work together. I love this team, the people are amazing. They are professionals – all committed to doing the very best job that they can for our clients.

Not only was I offered this new position, with a group of people that I really enjoy working with in a job that will challenge me, they also increased my salary again.

They increased my salary to $71,000 – an additional 6.02%, or a total salary increase of 12.70%.

This is a very market competitive salary – I’m certainly not overpaid, and I am still within the salary band for my position. It is a very generous increase, and I was so absolutely thrilled.

Here is a breakdown of my salary increases since I joined this company:

You might notice that there were a couple of increases in the month of October as well – sometimes, our company does an adjustment in that month to ensure market competitiveness, this is not typically an increase due to performance.

Savings Update

I'm very pleased to share that we have reached our 2013 goals for our Vehicle Maintenance, Vacation, Gifts, and Christmas Funds  Next week, we will hit our Emergency Fund target and then be able to focus all extra $$ towards our back yard project this year

p.s.
I think I forgot to tell you I got a raise

I did!  It's amazing.  I'll write another post about it now for tomorrow.

Conflicting Priorities

There are a lot of things that Jordan and I want to do, to have, over the next few years and while we want it all, we know we can't have it all - not at the same time anyways.  We're going to have to have a staggered approach.

Here's what we want:

1. A family, we'd really like to have a baby
2. Our back yard to be finished
3. To pay off our Car Loan
4. To invest in a property that could provide income in retirement
5. A house with a backyard bigger than a yard stick

I  have budgets for just about every scenario:

• Paying our Backyard in Cash this year (current plan)
• Split an annual camping spot with my mom
• Paying off our Escape in 2014
• Going on Maternity leave in 2014
• Going back to work w/ Baby in childcare and paying off the Escape in 2015
• Buying a Condo in 2014, 2015, or in 2016

You'll have to click on the image to look at them in more detail - but these annual budgets give a big picture view of some of our options.   There's an assumption the our income won't change (which it will) and I didn't include planning purchases like Christmas, Gifts or upping our Emergency Fund but you can see that I included Retirement/Education Funds in each scenario and that there is cash flow remaining under each one as well.

What have you done when you wanted it all?

Our Homes Value

Jordan and I got some great news this weekend!

As part of our research for an investment property, we contacted our mortgage broker from our first home purchase.  She did some market research on our current property, and she sent us every sale, conditional sale  in our neighborhood over the last year as well as all active listings.

We we went through the information (7 pages) we found two homes that have identical layouts to ours (same builder), and very similar interior features.   One sold in February, and the other in March for $376k and $377k.  I am very confident that after looking at these listings as well as other homes that are comparable (but not identical) that our home will have a reasonable market value of $376K once we finish our backyard this spring with deck, garage and fence.  Our home also has triple pane windows, an extra large parking pad (2*2 bigger than standard), and extra insulation - so there would be added market value there as well if a perspective buyer valued those things.

So. Excited.

The sale price of our home, before taxes, was $327,650K.  After down payment, taxes, fees, and mortgage insurance, our total financed mortgage was $348,818.80.

Our home has increased in value from sale price to market value 15% in 16 months!  Not only that, but we now are re-assured that the risk we took in putting 5% down, rather the 20% down that would have avoided CMCH fees, was the right choice for us!  We would still have been saving, and now, the home we wanted would have cost us $48,350 more then we bought it for.

We have essentially 'paid off' the fees, plus increased our equity by $27,181 (the difference between the mortgage and the new market value).

In a month or two's time, once our backyard is finished, I'll update our networth numbers to reflect the new home value.  

Investment Properties

Source: 
http://www.rohdeappraisal.com/wp-content/uploads/2012/05/015.jpg 

I have some very (potential) exciting news to share with you.

Jordan and I are thinking about investing in a second property. We are at a place in our lives where we want our money to start working for us, instead of only working for our money. There are a lot of options for investment, including buying shares where I work, the stock market, RRSPs/TSFAs, real estate ect.

One of our considerations when making this decision is our future, and not just retirement future. Jordan has an illness that may (or may not) prevent him from working full time to 65 – he may have to take a step back from things, and we don’t really know when that will happen. Starting to invest in property now, means we may be able to create a job (property manager) and an income stream for him outside of the traditional 6am-6pm environment that he’s in now.

Buying shares at my work is a very good investment, and we do have quite a bit of $ there – and will likely continue to do so albeit on a smaller scale (diversity is always good right?) but this is money we won’t have access to until I leave the company (hopefully when I retire in my 60’s).

We haven’t made a decision yet, but are going to start doing some serious research. Steps we’ve started on include:

• Rental market research where we live 
• General demographic research (what types of people are renting) 
• Real estate market research (will the property increase in value over time) 
• What type of property : Condo, Townhouse, a Home that could be split (top and bottom rental) 
• Affordability 
• How much can we invest? 
• Do we need a partner? 
• What would the BEP be 

We have also made connections with a few key people that will help us make a smart decision.

• Our mortgage broker from our home 
• She has several rental properties in a neighboring city and is currently running a mock up application for us including what we would need in rental income with some assumptions on our investment that I’ve given her 
• A colleague/Mentor 
• One of my mentor’s has an established set of properties that she and her husband manage in a neighboring city 
• I have had an initial conversation with her and have set up a coffee date once some of our other research is complete 
• She also invests in stocks and has well rounded advise to give 
• My Mom 
• She’s a smart lady, and knows her stuff 
• She ran her own business for upwards of 25 years with my dad

So there it is…I hope you read along as Jordan and I explore this potential opportunity together.

Please, ask questions, and challenge us – I want to make sure we think about everything we can before diving in.

DIY: Diaper Cake

For my girlfriends recent baby shower, one of our gifts (aside from hosting the shower), was a homemade diaper cake!  For a grand total of $152.30 - we set the family up to have everything they would need at bath time including:

• Two towels
• Two teddy bears
• A Bathtub thermometer
• Bath Toys
• Baby Powder
• Baby Oil
• Baby Shampoo
• Travel sized bath kit
• 6 Wash clothes
• A HUGE box of diapers was left over from the cake - you can see the edge of it in the picture on the left
• Pizza pan - okay - that's not for bath time, but that was to give the whole thing enough strength that it wouldn't fall apart when we carried it.

Here's a summary of the cost:

Bath Stuff/Teddy	$              91.85
Diapers	$              37.62
Ribbon	$              14.46
Pizza Pan	$                8.37

Total                                $             152.30
How did I put it together?

Well, you can see that each diaper is rolled up from end to end, what you can't see is that in the center of the cake are the big bottles of baby powder and shampoo.  Keeping it all together are dozens and dozens of elastic bands.

DIY Baby Shower Favors

Basket of Favors!

This past weekend I hosted my girlfriends baby shower.  Her and her husband are expecting twins!  A boy and a girl - the best of both worlds.

One of the things I did was create a custom favor.  The theme was the alphabet, so I bought two puzzles and magnets and hot glued them together to make the keepsake.

Back

In the bag I included a couple of chocolates, the magnet, and a little card thanking the guest for coming.

The total cost was $61.39, or $2.05/guest.  I had the glue gun, and card (just stock business card paper) already - so just had to buy the bags, chocolates, ribbon, puzzles/board game (x2) and magnets.


Here's a breakdown of the costs:

Networth Update: April 1, 2013

Another month has flown by!

Here is our network as of April 1st.  To the left you will see the details and to the right, the updated bar graph.

I've included a blurb about the mortgage and the escape below that I will include going forward as I get a lot of questions about those numbers.

You'll see now that my Shares have stalled as Jordan and I have chose to stop savings for that investment while we work to save for and pay off our big backyard project.

Cash represents our day to day spending account, and our chequing account is our 'work horse' account - which
fluctuates regularly as well.



A few notes:

Mortgage
Before tax, our home cost us $327,650, after tax it was $338,134 - after paying our down payment (5%) and adding CMHC Insurance (2.75%) for having a down payment of 5% rather than 20% our mortgage was $348,818.

So, you'll notice that when I report, for example, owning 3% of our home - I mean that we have paid that percentage of our mortgage off. You may also notice that we owe more than our homes City Tax Assessed Value. The value, as you may know, is arbitrary - because the home is worth only what a buyer will pay for it. We're not currently in the market, so it's difficult to know exactly what's it's worth. I used the value from our 2012 Tax assessment however; it is relatively common knowledge that tax assessments are not used when determining a sale price - but market value is.


Escape
We bought the vehicle new, off the lot - its fairly common knowledge that off the lot typically lose a lot of value as soon as you drive it off. I used a black book value website to come up with a value of $15,000. I actually saw pricing of vehicles ranging up to $22,000 or more for an Escape as old as ours however; I choose to use a more average valuation instead of over inflating it's value - because really...who knows what people would pay for it.