Landslide Limousine Pay And Benefits Strategy
Team C
HRM/531
December 12, 2013
Dr. Renee Green
Landslide Limousine Pay and Benefits Strategy
This paper is a comprehensive Pay and Benefits Strategy for Landslide Limousine (LL). The key factors in determining appropriate recommendations were taken from the organizations stated objectives and future forecasts.
Market Research
Market evaluation revealed that the limousine service industry is predominately small, independently owned companies. In the United States, 60% of limousine and chauffeured operations have less than five vehicles (Profile America, n.d.). The industry is labor driven, making employee wages the largest expense for an owner-operator, which accounted for 56.5% of industry revenue in 2013 (Brennan, 2013). The industry is highly seasonal (e.g. weddings, proms, graduations, birthdays, etc.); therefore, many companies employ part-time drivers on cash wage basis (with no or very few benefits) as part of their overall business strategy to reduce costs and maintain profitability. Examples of the typical benefits given to full-time workers are listed in Table 1.
Table 1
The Austin, Texas market is very competitive, with approximately 105 limousine and 25 chauffeur companies in operation employing five to 50 drivers each. The national average wage for a limousine driver is $13.30 per hour or $27,670 annually. Comparatively, the average wage in Texas is $10.88 per hour or $22,620 annually (Bureau of Labor and Statistics, 2012). The biggest challenge to limousine companies is the inability to hire and retain professional drivers primarily due to low wages with meager benefits relative to companies in other business sectors providing medical, dental, social security, unemployment insurance, worker’s compensation, or pension plans. Because the industry is traditionally a low-skilled occupation, it attracts immigrant workers to fill the shortage, which could be challenging in terms of...