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Base Pay of California Builders Up 6.8% in 2005
The average base pay of employees at 48 home building companies in California increased 6.8% between 2005 and 2006, according to a recently completed employee compensation survey conducted by the California Building Industry Association (CBIA).
The 2006 survey was conducted by CBIA for the third consecutive year in partnership with Strategic HR, a Newport Beach-based human resources consulting firm that provides a wide range of human-resources services to the association, and G.F. Wajda Associates, a Fallbrook, Calif.-based compensation firm specializing in the home building industry.
The survey includes comprehensive compensation data on 13,285 full-time home builder employees — both exempt and non-exempt — representing 72 different job positions in the categories of general management, finance, operations, property management, design center and sales and marketing.
Survey participants range from small regional builders to large national firms. The report is broken down geographically into Southern California, Northern/Central California, San Francisco Bay Area and the entire state.
Some key findings of the 2006 survey include:
- Average pay increase budgets reported for exempt and non-exempt employees were 5.0% and 5.1% respectively — significantly higher than the 3.9% budget increase for West Coast employees, as reported in a recent study by Hewitt Associates, an international compensation consulting firm.
- The average employee base pay reported by region was $60,248 in Central California, $65,564 in Southern California and $70,518 in Northern California.
- Forty-eight of the 60 “fee-for-service” medical plans offered by companies in 2006 were PPOs, while 73% of participants offered HMO plans.
- Ninety-eight percent of participating companies provided retirement plans in 2006, with 100% of those plans offering a 401(k) plan and 35% offering profit-sharing.
- All participating builders provided employee life insurance, with the face amount averaging $33,333.
- Exempt employee turnover was 15.7% in 2005, compared to 15.9% during 2004, and non-exempt employee turnover last year was 21%, up from 18.9% in 2004.
Jerry Wajda, of G.F. Wajda Associates, pointed out that the CBIA survey report also provides detailed information on short-term incentives, or bonuses, paid to home builder employees as part of their total compensation.
“Short-term incentives have always been important in the home building industry, and the size of awards and the high employee participation set the industry apart from industry in general,” he explained. “For example, in 2006 home builder executive bonus awards averaged 136% of base pay as compared to 40% for other industries, while bonuses for non-exempt employees averaged 11% compared to 5% for general industry.”
He noted that home builder executive bonus awards were down somewhat from 167% of base pay in 2005, while bonus awards at the non-exempt level increased from 8% in 2005.
Wajda also noted that the CBIA survey showed that home builder benefits practices stabilized in 2006 with no major changes from 2005.
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