Compensation Costs in Wyoming
by: Carola Cowan, Economist

"No significant change in compensation costs occurred between first and second quarter 2000."

This report updates the Wyoming Labor Force Trends article, “Employee Benefits: Compensation Revisited,” published in August 2000, in which we looked at the percentage of companies paying benefits to their employees and types of benefits as a percentage of total compensation. In this article, we focus mostly on compensation costs. Research & Planning (R&P) intends to develop a time series of compensation costs to track changes over time.

Compensation costs in this article are based on results from the first and second quarters of the 2000 Benefits Survey. Thanks to the 247 employers participating in the first quarter, and the 241 employers who participated in the second quarter of the Survey; without them, this report would not have been possible.

No statistically significant change in compensation costs occurred between first quarter and second quarter 2000. In the first quarter, wages and salaries accounted for 79.0 percent of compensation costs and benefits accounted for 21.0 percent (see Figure 1, page 2). In the second quarter, the cost of wages and salaries increased to 82.7 percent of compensation, and benefits decreased 17.3 percent for a percent change of 4.7 and -17.6, respectively (see Table 1, page 3). Most of the shift was due to a drop in paid leave, insurance and miscellaneous benefits (see Table 2, page 3). Retirement and legally required benefits remained stable. The percentage of companies offering a retirement plan to employees remained the same over the two quarters, while many benefits such as paid holidays, paid vacation and paid health insurance were offered by fewer companies in the second quarter.

The composition of employees in those companies who reported explains some of the drop in benefits between the first and second quarters. The percentage of production, service and maintenance employees was up slightly during the second quarter from 44.4 to 45.4 percent for all full-time employees, and from 57.6 to 61.7 percent for part-time employees (see Table 3, page 4). The percentage of part-time employees was also up from 17.1 to 18.9 percent (see Figure 2, page 4). Since part-time employees and employees in production, maintenance and services tend to be less likely to receive benefits, the difference could explain some of the decrease in benefit costs. However, as we take repeated samples in future years, the quarter to quarter and over-the-year patterns should become distinguishable and predictable.

Two quarters of data are not enough to identify a general trend. Differences between quarters in the level of benefits are partly a function of employer response rates. By the time the full annual cycle is completed and estimates are adjusted for non-response, we will have a more complete picture of the benefits profile in Wyoming. Therefore, as we continue to collect data, we are able to see meaningful developments in compensation costs. Keep watching for survey updates in future issues of Trends.

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