Variations in earnings refer to differences in the amount of income earned by individuals within a particular group or workforce.
From the young lad running on the street to the old woman admiring the view on her patio, everyone has had to do some sort of work.
You work to cater for yourself and loved ones, have funds to cover medical emergencies, visit exotic locations and contribute positively to the lives of the less privileged in our society.
As far as the east is from the west, so vast is the distinction between several occupations. Some are high up on the pedestal and others are considered menial jobs.
Different industries exist in the workforce today. Apart from the popular route of getting a degree from college, getting relevant skills without entering the four walls of a classroom can land you your dream job.
The ever-evolving world of the workforce of man will continue to change as far as the earth keeps rotating. As a result of this, variations in the earnings of workers will continue to develop.
What makes one role superior to another? What makes an industry more lucrative than others? What makes two people in the same role in different industries receive different pay?
This article clears the air on why variations in earnings exist among workers.
Reasons Why Variations in Earnings Exist Among Workers
1. Location
A graduate trainee role in Lagos, Nigeria probably pays more than one in Port Harcourt, Rivers State. Also, a job in Washington DC is bound to pay more than one in Alabama USA. However, there are a few exceptions to this rule.
This has also become the case in Nigeria where the “japa” syndrome has become a full-blown epidemic. Citizens looking for high-paying jobs and opportunities in other countries.
2. Qualifications
A driver at Ericsson, a household name in the telecommunication industry cannot perform the duties of the manager of the Central Delivery Unit in the organization.
Same company but different roles needing different qualifications.
This is one of the major causes of variations in earnings among employees.
3. Knowledge and Skill
A worker who is more skilled in a particular industry will get more pay than one who lacks the basic skills to thrive in the same industry.
Consider this scenario, a company requires the services of an engineer with exceptional AUTOCAD and Revit skills. Out of a large number of applicants, two make it to the top with one being 80% skilled and the other being 40% skilled.
The company can decide to employ both but on a different pay grade because they would have to brush up on the skills of the second candidate.
4. Productivity
The productivity of employees varies from department to department. Some individuals can manage their tasks effectively without supervision while others have to be checked on to ensure that things are going smoothly.
This can lead to a pay increase and promotion for more productive employees.
5. Type of work
A pilot CANNOT be paid on the same scale as a cleaner in the airport. Not because one work is more important than the other, but because of the risk involved. A pilot has to drop all personal problems at the door before sitting in the cockpit.
He cannot afford to be absent-minded. In most cases, the higher the risk, the higher the pay.
6. Gender Bias
In some sectors, women are paid less than their male peers in the same roles. Though gender bias has reduced drastically in the corporate world, it is still prevalent in menial jobs.
Furthermore, with the continuous gender equality advocacy gaining rounds, this is gradually taking a backseat in today’s workforce.
7. Duties and job description
The Head of the HR department will be paid more than the HR staff in any organization. This is because he or she is tasked with more responsibilities when compared with the job description of other team members.
The duties and job descriptions of employees across various departments determine pay differences.
8. Type of industry
A receptionist in a large corporation will be paid more than one in a new social media agency.
Same position, different salary.
This is because a large corporation has been in existence for decades and has overcome different financial seasons.
Furthermore, working conditions in the industry like working with heights is an important factor to consider.
9. Consistency in work
Employees who work part-time or full-time have different pay grades. Also, some persons are employed on a contract basis where pay stops once the contract is completed.
This scenario can make employees be on different salary structures at various points in their lives.
Conclusion
These variations in earnings among workers will continue to exist as far as job descriptions and industries differ across different countries.
Staying ahead of the curve by being productive, getting the right qualifications and getting the relevant skills in your sector can take you one step closer to boosting that pay grade.
Read here to find out how remote and hybrid jobs are shaping the workspace.
