Wednesday, April 16, 2008

Pricing and Geography: A More Effective Method of Pricing Jobs

Ann Bares, at her blog Compensation Force, has a great post about pricing jobs in different geographical locations. This is an issue that many an HR person has struggled with if they have multiple locations. Two people doing the same job, requiring the same skill level, however, they are located in two different geographical areas, of which one is more expensive to live in than the other. When this happens there is pressure to pay the one more than the other. And the basis that is often used is Cost-of-Living.

Ann suggests that rather than using cost-of-living it would be more effective to use cost-of-labor as the more appropriate measure. She gives several examples of places that have high cost-of-living indexes but lower cost-of-labor indexes. So check out her blog, by clicking the link above, and get a better understanding of this effective way of pricing a job.

1 comment:

Ann Bares said...

Thanks for the link, Michael! Having received a couple of interesting questions via commenters on this post, I may do a follow-up in the next day or so (am a bit behind, as a result of trying to get the Carnival up, which I finally did a few minutes ago...)