Mean Wage Definition
Mean wage, in simpler words, is the usual wage made to a working individual for the service s/he has performed in a specific period of time.
HR managers often find it difficult and take a large chunk of time to comprehend the term mean wage. Are you also here after a lot of brainstorming and research?
If yes, let us tell you that you are in the right place. Here, we will be discussing everything about the mean wage including the frequently asked questions.
So, are you ready to dive in?
Let’s explore:
What is Mean or Average Wage?
Mean wage also termed average wage is the average salary you give to a working individual for his or her service. It usually comes in handy for surveys related to employee salaries. If you estimate the right salary given to a particular role or position, you cannot just stay ahead of the curve but also hire/retain the top talent for your organization.
That’s not it, there are more reasons why you should be computing the mean wages of employees correctly. Let’s find it out in the next section!
Importance of Mean Wage
From employers and HR professionals to people looking for jobs, having a good understanding of mean wages is extremely important for everyone in the job market.
Talking about candidates, the mean wage shows them how much different organizations are paying for different roles. This can eventually help them to quote salary expectations and negotiate the best packages according to the market standards.
Average salaries play a vital role for HR professionals, recruiters, and employers as well. It helps them to offer competitive salaries and create relevant JDs while recruiting.
Understanding the Annual Wage Definition
As the name itself suggests, the mean annual wage is the total sum of salaries (in a year) of a company divided by its estimated employment.
The simpler formula to calculate mean wage is as follows:
{a+b+c……n}
This means that if you want to compute the mean wages of six different wages, you will have to add the values of all the six wages and then divide the sum by five.
For instance, the salaries of six employees working as Senior Marketing Manager in different companies are as follows:
- Rs 2,00,000
- Rs 2,28,685
- Rs 2,72,500,
- Rs 3,18,1972
- Rs 3,22,066
- Rs 3,00,000
To find out the average salary of the same, you will first have to add all the above-mentioned salaries. You will get a sum of Rs 4,505,223. Now, divide the received sum by 5. You will get a mean salary of Rs 9,01,044.6.
In the same way, you can effortlessly compute average wages across different locations and companies.
Mean Wage Calculator
If you are not that good at maths or want to calculate the mean wage of a role on the go, you rely on mean wage calculators online. Such calculators are specifically designed to help employees/employers/recruiters/HRs calculate average wages in just a few seconds. All you need to do is fill in the necessary details and click the calculate button.
Voila! You have covered everything related to mean wages.
If you still find it complicated, you can rely on HROne. HROne, the simplest HR software, will help you manage and compute such difficult payroll components in no time. Give HROne a try to make processes super easy and fast!
FAQs
What is meant by mean wage?
Mean wage is the average salary paid to a working individual in a certain role, department, or location. It helps both job seekers and recruiters to get a clear understanding of the market standards. As a result, companies stay in alignment with their competitors.
How do you calculate the mean wage?
Both mean and average wages are calculated using the same formula. You have to add the salaries of employees from different companies for the same role. Then, divide the same by the total number of employees. That is, {a+b+c+d}/4
What is the significance of calculating mean wages?
Companies need to look at the industry standards to understand how much and how often to pay their new hires/existing employees. Mean wages help human resources managers figure out how much to spend on different roles and help job seekers understand how much they will be paid.