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September 2006

The Sin of Wages

The NSAA recently released its Wage and Salary Survey. We review how the industry fares compared to the rest of the workforce at large.

Written by Skip King | 0 comment

Let’s answer one big question right now. Yes, you may very well be underpaid if you compare your paycheck to those of your guests who hold an analogous job out in the muggle’s world. But you already knew that, and besides, you know why. Like many others in this industry, you got sucked in by your love of the sport, then found that you love the business.

Your pay is the price of that love. Ski industry wages are essentially set by the market. If a resort can get a good crew of lifties for $9 per hour, there’s no good argument for offering $9.01.

The NSAA’s recently released Wage and Salary Survey catalogs the pay ranges for more than 200 job categories at ski resorts. Conducted by Sierra Research Associates, the survey is quite comprehensive: 104 ski areas, which between them post approximately three-fifths of all U.S. skier visits, provided data. The list of jobs is wonderfully comprehensive and provides a glimpse of national and regional pay ranges for just about every ski-area position.

The survey contains a few surprises. First, you might expect that the Rocky Mountains, home to so many megaresorts, would offer the highest raw average wages of the five NSAA regions. They’re actually the lowest. The penurious Northeast (of all places) pays best, with an average wage of $15.37 per hour. Even so, the differences aren’t huge; the Rockies offer raw average wages of $14.95 per hour.

The survey also shows weighted average wages, which were calculated by factoring in each resort’s employee base. Without the weighting, large resorts—or small—could skew the regional averages, based on the number of employees they have in a given job category. The weighted average reflects the real labor pool for a region or group of resorts. Surprise: the Northeast came out on top again, with the Rockies second and the Midwest last.


Wage Restraint
As we’ve pointed out, working in the winter business is no way to get rich. Guys and gals in the corner offices do OK, but few rake in massive shekels when you consider the throughput—how much money flows through a successful resort. Although compensation for line workers in the Rockies lags behind that of their counterparts in other regions, Rocky Mountain GMs do best in the nation. The average annualized salary of a Rocky Mountain GM is just shy of $153,000, more than twice that of the blokes in the Midwest, who make do on an average of $72,000. Of course, skier visits and their close cousin, staff size, are the major determinants of GM salaries; the more of each, the merrier—at least, if dollars are what makes you happy.

One caveat. The survey is missing one small but important category of ski industry pros: the honchos at multi-resort companies. If you’re curious about their pay and actually enjoy the feeling of envy, wade through the SEC filings of the publicly traded skicos to see their paycheck numbers.

Also, remember that the survey doesn’t reflect local wage burdens, or bennies like health insurance, 401Ks, free season passes, an active outdoor lifestyle, or other items that reflect the total value of compensation packages. But it does give an interesting look at what various gigs pay, nationally and regionally.


Skill-Position Pay
Ski areas generally are able to recruit sufficient front-line seasonal employees who constitute the bulk of the work force. And senior executive positions are usually easy to fill. But in between the lotus-eaters and the line staff, there’s a tier of skilled technical employees—for example, mechanics who understand hydrostatics, pump-and-compressor people and lift electricians—that has been the focus of intense recruiting in recent years. Because of the specialized applications of mechanical and electronic equipment in the ski industry, it can take years for a new hire with good basic training to come fully up to speed. Consequently, this is the arena in which the ski industry is most vulnerable to turnover and, unfortunately, where it sees a lot of it.

What’s behind that turnover—wages, or something else? To put things in perspective, let’s take a look at several job categories and some analogous jobs outside the ski industry (see table):

Now, it’s important to note that these are national numbers. Local numbers may vary dramatically, in both the ski and non-ski fields; resources such as salary.com can provide rates in your area.

Even so, skilled and technical jobs at ski areas tend to be paid somewhat lower than their counterparts in the real world. The gap is two bucks an hour or more at the low and median levels, and bigger still at the 75th percentile.

When it comes to ski patrollers, you could argue the gap isn’t a bad tradeoff when you consider the patroller’s working environment against that of their real-world counterparts (EMTs and Paramedics). After all, patrollers work in a clean environment, get to enjoy a fair amount of ski time on the clock, and nobody ever shoots at them.

And not all ski area employees are paid less. Executive chefs at ski areas actually tend to be paid above the national norms. Then again, it’s important to remember the volume of food they’re responsible for. But even if handsomely paid, you should never expect a cook to hang his toque behind your door for more than a year or two. Cooks are, by nature, professional vagrants; travel is part of the job’s appeal.

In fact, a number of the technical trades on which the ski industry relies attract workers who enjoy working in a variety of settings and who might want to move on in a year or two just for the opportunity to do something different.

But there’s no question that many of the industry’s most crucial employees—the guys and gals who actually make the wheels turn, the electrons pulse—could be making more money elsewhere. And pay, notes Sierra Research Associates principal Harold Richins, is only one part of the problem.

“It can be extremely expensive to live near a ski area,” he says, “and it can be nearly impossible when you’re trying to start a family on an annualized salary of about $35,000.”


Sweetening the Deal
Richins, who is a professor of ski area management at Sierra Nevada College near Lake Tahoe, also believes that ski areas need to look closely at the overall compensation packages for key employees. “It’s not just the money,” he says. “Benefits and the availability of year-round work are among the factors that you have to consider if employee retention is the goal.”

Health insurance aside, bennies are a tough business. Ten years ago, a mid-level employee with a spouse and a couple of kids would have netted a benefit worth several thousand dollars on ski passes alone. But with the rise of el-cheapo season passes, the value of that benefit has severely diminished. And cafeteria discounts, while nice, don’t do much for a young family. That’s why it’s important to offer good health, dental and retirement plans.

Bonuses help. But most bonus plans are profit-based—understandable, perhaps, but not particularly helpful in a bad snow year, when year-round staff tend to work the hardest. Smart companies are moving away from a profit-sharing bonus model and looking more at performance-based models. “We inspect what we expect, and we reward for it,” says Laura Moriarity, who oversees Human Resources for Booth Creek Resorts. “For our core people, we don’t just look at the financials. We also look at how well a manager performs in a year when the stars don’t align.”

Only resorts with significant on-mountain or base area construction schedules—or busy summer programs—can really afford to keep significant numbers of skilled staff in the year-round, as opposed to seasonal, category. To keep seasonal employees returning, some resorts work with seasonal businesses whose payrolls peak in the summer. Sunday River, for example, recruits many of its professional ski patrollers from a nearby Outward Bound school.


The Housing Crunch
As Richins notes, housing may be the most critical issue. We’re not talking about cinderblock-with-floor-drains dorms for transient seasonal staff. Young, technically oriented staffers want the same things their non-ski counterparts do: a home of their own, the opportunity to start a family. That’s still doable in many areas, but in premium resort areas it can be nearly impossible to find housing that a couple with an income under $100,000 can afford.

For some resorts, it may well be worth sacrificing some real estate revenue in order to purchase or set aside a tract upon which modest, affordable and high-density homes or condos can be created specifically for middle managers and technical staff. Allowing promising younger staffers to begin building equity in a home is a terrific way to make sure they stick around. And ski areas that can’t staff adequately will eventually have a tough time selling high-end vacation homes.

In some locations, local government is stepping in. In Truckee, Calif., all major new developments must also create a complement of “affordable housing.” “Affordable” is a relative term; some of the new projects start at $325,000. But even that price puts a home within reach of a younger couple on the ups. Well-thought-out projects cap the amount of appreciation a homeowner can recognize, theoretically allowing a family to build equity while keeping the home within reach of the next buyer.

Ultimately, the market will decide what appropriate compensation packages for ski area employees will include. If a ski area can’t get a given type of employee for the price it wants to pay, it will have no option but to improve the package—or do without. Doing without may not be an option, and progressive resort companies are already exploring advanced benefit programs. They are getting the cream of the labor pool as a result, and this may drag the rest of the industry into compensation increases as well.