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Base Salaries Remain Steady, But New Technologies
Drive Pay Increases
Across the aerospace and aviation industries,
base-pay salary increases generally are less than 5%. However, more
employee compensation packages are including profit-sharing and
variable-pay components.
Aerospace companies are becoming increasingly
willing to pay more to keep talent they want and need. For example,
transportation and aerospace employers are increasingly comparing
salaries among all industries, not just their own, ensuring that
software developers are on par with their peers at "dot-coms" and
information technology and computer networking firms.
However, this year's Aviation Week Careers Special
Report compensation survey—which included interviews with more than
70 companies as well as a comprehensive survey of engineers' salaries—determined
that aerospace continues to offer compensation primarily in base
pay rather than stock options. However, most compensation managers
indicate that companies have shifted approximately 10% of base pay
into variable compensation, while offering ever-stronger retirement
and 401(k) packages that include company stock. Some also are using
stock options as incentives for employees continuing their education
or increasing sales.
Kit Darby, president of AIR Inc. in Atlanta,
reported that airline pay is being driven upward, not only by demand
for pilots, but in part by the introduction of new aircraft. The
deal inked last year between United Airlines and its pilots raised
the standard, and now Delta Air Lines is facing the prospect of
raising pay scales again.
Because pilot pay scales among most airlines
are comparable in the early years of a career, quality of life is
a key consideration for aviators seeking work at commercial carriers.
Northwest Airlines is conscious of the need
to address quality-of-life issues, such as attractive base locations,
commuting options and career development. The airline offers one
of the shortest minimum times to upgrade to captain—less than five
years. In addition, use of new aircraft is an important part of
the carrier's commitment to its customers and employees.
Jerry Huss of California-based IASCO, a contract
aviation training company, said the alternative for an airline pilot
is a lease or contract situation. "You don't lose seniority, though
the pay is somewhat less," he explained. "You can move, though,
without starting completely over."
Many employers are retaining valuable employees
by focusing on "re-recruiting" current workers with critical skills.
Vaughan & Co.'s David Vaughan said, "Supervisors
who want to keep talented people need to be talking to them about
their careers, about what experience they want to get and when they
need a break from a long-term project. A counteroffer is not going
to remedy the situation [if the employee wants to leave]," he said.
"Money is an emotional response to other things. An employee is
not going to leave if she likes her work, respects her boss and
believes in the company."
Ralph Kimmich, director of benefits and compensation
for Southwest Airlines, says that although his airline pushes for
competitive pay, it is not attracting or keeping employees based
on salaries. "We want our culture to be the driver of why someone
chooses Southwest and stays with Southwest."
Al Haggerty, retiring vice president and general
manager of engineering for Boeing in St. Louis, said aerospace companies
need to do a much better job of using their cutting-edge products
to create excitement about working in the industry. "There aren't
many other places where you can put an engineer on board a fighter
jet," he said.
As many Internet companies have faltered, talented
people are returning to aerospace after having ventured into the
dot-com world. The result, recruiters believe, will be the ability
of aerospace to attract employees ready to bring new ideas to the
table as a result of having visited the "other side."
John Reinert, director of business development
at Structural Integrity Engineering (SIE) in Chatsworth, Calif.,
said the technical challenges of aerospace are a major draw for
those returning from the dot-coms. SIE, which specializes in structures
and damage tolerance, has just 25 employees but is looking to hire
engineers.
Washington, D.C.-based Avitas is another small
company that is looking to add people. Doug Kelly, vice president
of asset valuation for Avitas, said his company is recruiting new
hires for each of its four areas of expertise: aircraft valuation
publications, aircraft records and audits, aviation consulting services,
and structures and avionics engineering.
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