Survey: changes in benefits, not wages

More retailers are offering retirement benefits to employees, but fewer are paying 100 percent of their employees’ health care benefits. Overall, statewide average salaries have remained close to what they were in 2002.

Those are among the findings of the latest Michigan Retailers Association Survey of Retail Salaries, Wages and Benefits. Anderson Economic Group of Lansing and Mitchell Research of East Lansing conducted the survey in September 2004 for MRA.

The survey is MRA’s third—previous surveys were conducted in 2000 and 2002. MRA plans to sponsor the survey every two years to track trends in Michigan’s retail industry.

“The decline in the number of retailers who pay full health care benefits is not surprising, given the continued spiraling costs of health care,” said James P. Hallan, MRA president and chief operating officer. “Although we helped achieve small market insurance reform in 2003, the full benefits of the legislation will take longer to be felt widely in terms of stabilized rates.”

The decreases in health care coverage continue a trend that was found in 2002 and occurred in every employment category except buyers.

The increase in retirement benefit offerings suggests that retailers want to improve their benefits package in a more affordable manner.

“Although less than half the respondents reported offering retirement benefits, that number appears to be on the rise,” said Patrick Anderson, of Anderson Economic Group. Among those retailers who provide retirement benefits, a 401(k) or similar plan, with or without matching contributions, was more commonly offered than a Simplified Employer Pension (SEP).

The survey—designed to help owners consider their employee compensation and benefits in light of what similar stores offer—has been refined each time, according to Bruce Johnson, of Gazelle Sports in Kalamazoo. Johnson has chaired the committee of MRA board members who have worked with Anderson officials since the project began.

The survey asked about salaries, wages, bonuses and commissions; medical, dental, insurance and retirement benefits; vacation days, sick days and merchandise discounts for a wide range of retail employees.

The report breaks down data by region, retailer size (based on gross annual sales) and employment category, including store manager, assistant manager, full-time salesperson, part-time salesperson, clerk, buyer and delivery.

Overall, statewide average salaries have remained close to those in 2002. Three out of the six occupational categories—assistant managers, full-time clerks and delivery staff—showed a slight increase in average salary. While declines did occur in the average salaries for managers (down 1.2 percent), clerical staff (down 0.4 percent) and buyers (down 2.4 percent), they were all still up from their 2000 level.

Retailers in metro Detroit paid their employees the most, followed by the Capital/Ann Arbor area and the southwest Michigan area. Retailers in the Saginaw Bay area and northern Michigan often paid lower salaries. These areas have fewer urban centers and are not as likely to support big-box retailers with high gross annual sales.

Across the state, the average starting hourly wage was $7.87 for fulltime employees and $7.28 for part-time staff. Southwest Michigan retailers offered the highest average starting salary for full-time clerks, at $8.34, while retailers in metro Detroit paid part-time clerks the highest average starting hourly wage at $7.61.

Retailers in the Saginaw Bay area (41 percent) and the metro Detroit area (51 percent) were most likely to pay 100 percent of their managers’ health coverage. Retailers in northern Michigan (28 percent) were least likely to pay 100 percent of coverage.

Store managers in the Capital/Ann Arbor area were most likely to receive at least some employer-paid health coverage. In northern Michigan, however, 47 percent of retailers did not offer any health benefit.

In the 2004 survey, 58 percent of retailers who responded had gross annual sales of less than $500,000, up from 54 percent in 2002.

Other statewide findings:

• Less than 30 percent of full-time employees work on commission, but many receive bonuses. The bonuses are usually less than $1,000 per year.

• Almost all retailers offer employee discounts on merchandise as a major benefit. Most often, the discounts are 10 to 25 percent, but many are 50 percent.

• Approximately 70 percent of retailers offer paid vacations to managers, assistant managers and full-time clerks.

MRA members who participated in the survey were mailed a free copy of the report in November.

Other members may purchase the report from MRA for $75; non-members for $125.