Silicon Valley jobs and salaries match the high-tech pace

Everyone knows what an effect the high-tech products of California's Silicon Valley have had on our lives. But the new industries are also important as setters of salary and benefits trends. The dense concentrations of computer firms in Silicon Valley allow people to hop from one job to another ``without even having to change where they park their car,'' says Steve Patchel of William Mercer-Meidinger, consultants, in San Jose, Calif. ``A long-service employee is one who has been there for three years.''

Rapid turnover and fierce competition for employees drives up salaries. The new industries of California and other high-tech belts also make more use of stock options, profit-sharing, and other benefits than do firms in more established industries.

``Here, it becomes almost a matter of product differentiation,'' says Mr. Patchel; each firm wants a distinctive compensation program. Older firms contemplating a new compensation system will ask, ``Who else has got one like this?'' and take comfort if precedents can be found in other companies.

``In Silicon Valley,'' Mr. Patchel says, ``A company will ask, `Does anyone else have this?' and if the answer is no, they'll say, `Great, let's do it.' ''

Not everyone has the luxury of potential employers falling all over each other to see who can offer the best pay package. White-collar salaries still lag behind inflation, and, observes Joel F. Levy, partner at Coopers & Lybrand in New York, the slowdown in inflation has been ``playing tricks'' lately. ``You may have been rated `excellent' last year and got a 12 percent increase, and you may get rated `excellent' this year and get a 6 percent increase.''

Hewitt Associates, a Chicago-based consulting firm, has just completed a survey of 700 employers, including universities and hospitals as well as private companies. The survey found an across-the-board average salary increase of 6 to 6.5 percent for 1984. Increases for this year were projected to be in the same range.

Mark A. Murray, account manager at Hewitt's Boston office, notes a trend away from blanket cost-of-living increases and toward merit increases. ``They're trying to reward good performers.''

He sees high cost increases for benefits -- notably health care -- squeezing ``the compensation dollar.'' Companies are trying to tailor benefits more effectively -- and more tax-cost effectively. Chart: How green is my valley. Silicon Valley salaries are going up faster than those of the nation as a whole. The reason: stiff competition for skilled employees and high turnover in electronics. These factors even affect salaries in other industries. In fact Silicon Valley workers, including non-electronics workers are seeing bigger raises than electronics workers nationally. Salaried workers' average increases, in percentages:

1984 1985

Actual Projected Silicon Valley, electronics industry: 8.8 9.3 Silicon Valley, all industries: 7.9 8.0 Electronics industry, nationally: 7.3 7.2 All industries, nationally: 6.5 6.4


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