16  ILLINOIS BUSINESS LEADER
CONNECTING
while Black women earned 91.5 per­
cent compared to their male counter­
parts, telling us that there is a lesser 
difference in the gender pay differ­
ence among the Black employees 
compared to the White employees.
Location 
An employee’s Median wage can also 
differ depending on their location. 
Some areas in a country offer higher 
salaries for positions because of 
higher demand. The cost of living 
in a location plays another factor in 
increasing or decreasing the Median 
Wage of a specific job.
HIGHLIGHTING THE 
IMPORTANCE OF MEDIAN 
SALARY TO LEAD THE 
MARKET
An employer can lead, lag, or match 
the market when paying their em­
ployees. If your company can gather 
market data on the median salary 
of similar jobs in a specific industry, 
you will be able to build a benchmark 
salary that you can confidently offer 
to a potential job candidate without 
spending more money on paying sig­
nificantly above the competitive rate. 
If the compensation philosophy of 
your company is to lead the market, 
then the ideal salary you should offer 
must be higher than the median pay. 
	
When employees know that their 
organization is paying them above 
the median pay, it will be less likely 
for them to leave because they are 
confident that they are receiving fair 
pay from the organization. This is 
especially important if you want to 
retain the top talents of your com­
pany. Keeping them around means 
you get to maintain high productivity 
from your employees, and this will 
contribute to the success of your 
business operations. In addition, 
having data on the median pay will 
also help control payroll costs to keep 
your company’s compensation level 
sustainable.
When employees 
know that their 
organization is 
paying them above 
the median pay, it 
will be less likely 
for them to leave 
because they are 
confident that 
they are receiving 
fair pay from the 
organization.

View this content as a flipbook by clicking here.