Are salaries and wages synonymous? The answer is no. Although both concepts refer to the financial compensation or remuneration that a company’s employees receive, there are certain small differences between salary and wages, as we explain below.
What is the salary of an employee or a professional?
A salary is fixed remuneration that a worker or professional receives for doing a particular job during a specific working day. It is, therefore, a fixed concept, determined by a certain financial consideration paid in exchange for work done during a certain period. Normally, neither the amount payable nor the hours worked will vary, and this also applies to the frequency of payment.
The conditions must be mutually agreed by the worker and the company or employer before employment commences.
In short, a salary is a fixed amount of money that an employer pays to employees, often at the end of the month, regardless of whether there is a public holiday, for example.
What are wages?
Wages are a somewhat different concept. It also refers to the remuneration received by the worker, but in this case calculated according to the hours that he/she spends working and, in some cases, the amount of work that he/she does.
In other words, wages are remuneration that an employee receives in exchange for services provided, based on parameters such as the number of days or hours.
So… what is the difference between salary and wages for practical purposes?
The fundamental distinction is that a salary is always a fixed amount of money that the employer pays to employees, regardless of whether there are public holidays, for example.
However, wages are variable, since, if an employee is hired for a number of days or hours, when there is a holiday or the employee does not work for other reasons, the amount they receive will be different.
Do wages and salaries both attract and retain talent in the company?
We started the article with a question and now we continue with another: Are salaries or wages, which are basically two ways of calculating the financial remuneration received by a worker, sufficient for a company to attract (and retain) the best professionals?
And the answer is also no, or at least not exclusively. Remuneration is undoubtedly a very important factor, which all employees take into account when choosing to work for a certain company and, later, deciding whether or not to stay with it. But it is not the only reason.
Younger employees in particular, such as millennials, who are often very well qualified, value many other things, in addition to their salary or wages.
A good working environment, the values of the organisation, opportunities to achieve a good work-life balance and, ultimately, well-being in the workplace are key factors in persuading good professionals to work for us, to perform well, and not be tempted to sell their talent to the competition.
In order to meet these demands, companies must resort to another type of remuneration, the “emotional salary”, which includes all non-financial compensation that focuses on emotions and wellbeing, in short, on making life easier for employees, so that they are happier and more satisfied.
Incentives such as offering a flexible remuneration platform that includes nursery tickets, transport allowances or restaurant vouchers, as well as special conditions in gyms and other leisure facilities, are highly valued among young employees.
Other ways of retaining talent are flexible timetables, combined with teleworking if possible, plus those small details that many business managers mistakenly overlook: a comfortable, bright, clean, spacious working environment with an area to chat with colleagues, and enjoy switching off and relaxing for a few minutes, which is often essential for employees to perform at a high level during the rest of the day.