People Cost Examples
Wabash hires hundreds of temporary workers, with few benefits, and wages under the $9.16 starting rate for its permanent workers. (Year 1995 – SIC 3715)
Explanation: This Company hires permanent workers at $9.16 an hour and then pays benefits in addition to that hourly rate. Temporary workers have very few benefits and work at a rate below $9.16. The hourly rate and the benefits the permanent workers earn may be included as People costs.
Pitt-Ohio will experiment with city trucks. These trucks have lower driver pay scales because the drivers do not require a DOT-certified license. (Year 1997 – SIC 4213)
Explanation: The license required for the driver could be part of the People costs for the DOT – certified drivers.
Woodward workers’ wages are at 85% of the industry average. But, for the last two years workers have received a profit sharing bonus equal to about 50% of base pay, putting their gross pay well above the local averages. (Year 1986 – SIC 3728)
Explanation: The profit sharing bonus is part of the People costs for Woodward employees.
To avoid lay-offs, Lois Lane got New York State to subsidize payroll through a shared work program. The employees work fewer hours, but the state made up the difference in their take-home pay for as long as twenty weeks. (Year 1991 – SIC 4724)
Explanation: The subsidy by the State of New York reduced the People costs for this company.
JB Hunt pays its drivers more than other truckload carriers in order to reduce turnover. It invests to hire good drivers and to train them well. (Year 1998 – SIC 4213)
Explanation: The cost of hiring and training new drivers is part of the People costs for this company.
With 75% of its production in Mexico, at an average hourly wage below $3.00, the company now boasts strong 13% margins in its electric motors division. (Year 1997 – SIC 3621)
Explanation: The low hourly wages are part of the People cost for this company.
The unionized less-than-truckload carriers developed a concept called flexible work weeks. This concept enables companies to avoid paying a premium for weekends if that is part of the “week.”
(Year 1998 – SIC 4213)
Explanation: The premium the companies have been paying for weekend work is part of the People costs for these employees.
Merck invested in work and family benefits after it discovered that they were a source of employee turnover.
(Year 1988 – SIC 2834)
Explanation: This company added benefits, increasing its People costs, in order to reduce turnover, another People cost.