Compensation Study
Preliminary Results
Presented by:
CBIZ Human Capital Services
January 11, 2016
Introduction
CBIZ Human Capital Services
●
Priya Kapila, CCP, SPHR
Senior Manager, Compensation Consulting
2
Introduction
What we want to accomplish today:
• Review the compensation study methodology
• Discuss the preliminary project results
• Present recommendations and next steps
• Answer your questions
3
Introduction
The District has asked CBIZ to review current
practices and recommend improvements related to:
•
•
•
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Job classifications and descriptions
Current compensation compared to market
Internal equity assessments
Compensation policies and procedures
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Methodology
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Project Steps
1.
2.
3.
4.
5.
6.
Planning Meetings
Job Evaluation
Compensation Analysis
Salary Schedule Development
Benefits Cost Analysis
Policy Review and Recommendations
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Job Evaluation
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Job descriptions and job analysis questionnaires
(JAQs) were evaluated to identify:
– Essential Functions
– Duties and Responsibilities
●
Job descriptions, not titles, were used to ensure
correct matches to the market.
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Job Evaluation
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Job Classification and Description Updates
– Title consolidation and separation
– Title revision to better reflect job roles and create
consistency throughout the District
– Review organizational hierarchy and clarify career
paths
– Establish consistency and employment law
compliance
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Compensation Analysis
What is market pricing?
• Valuation of pay for the District’s jobs in the external
labor markets.
• Key considerations when determining labor markets:
– Location
o St. Joseph, Missouri
o Region
o Nation
– Industry
o School districts
o Broad spectrum of employers
– Size
o Revenue/Operating budget
o Number of employees
o Number of students
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Compensation Analysis
Custom Survey – Peer Districts
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•
•
•
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Blue Springs*
Center*
Independence*
Kansas City*
Lee’s Summit*
Liberty*
* Survey participant
•
•
•
•
•
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North Kansas City
Park Hill*
Platte County*
Raymore-Peculiar*
Raytown*
Smithville*
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Compensation Analysis
Enrollment
Students:
Administrator
Students:
Teacher
Tax
Rate
Current
Expenditures
(Millions)
Total
Expenditures
(Millions)
Blue Springs
14,425
223
16
5.13
136.226
178.205
Center
2,613
153
11
5.93
31.863
39.116
Independence
15,067
251
16
4.43
134.441
180.806
Kansas City
15,258
172
13
5.27
208.334
251.505
Lee’s Summit
17,834
241
15
5.26
173.602
250.078
Liberty
12,023
261
15
5.35
108.732
145.167
North Kansas City
19,853
276
14
5.23
189.579
274.445
Park Hill
10,921
223
15
4.95
113.791
154.172
Platte County
3,964
195
14
3.89
36.310
47.583
Raymore-Peculiar
6,033
213
15
3.75
50.900
64.113
Raytown
9,102
184
14
5.15
82.701
110.708
Smithville
2,560
206
16
3.44
21.840
25.733
St. Joseph
11,871
229
13
4.28
103.671
135.710
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Compensation Analysis
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Market Benchmark
– 50th percentile: Also known as the median; this is the
middle point of the market. By definition, half of
organizations pay more and half pay less. A majority
of organizations follow a compensation philosophy
that strives to pay employees at the median.
– An objective of the project was to align salary range
midpoints with the market 50th percentile. This is
typically the point at which pay for fully-functioning,
satisfactorily-performing employees is targeted.
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Compensation Analysis
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Definitions
– Base Salary: The annual fixed rate that an individual is
paid for performing a job.
– Employee Benefits: Non-cash compensation provided to
an employee. Benefits reviewed include:
• Paid leave (e.g., holidays, vacation, sick, etc.)
• Medically-related benefits (e.g., health insurance, dental
insurance, vision insurance, short- and long-term disability
insurance, life insurance, etc.)
• Retirement plan benefits
• Other common benefits (e.g., education cost
reimbursement, specialized training and development, etc.)
– Total Compensation: The sum of base salary and
benefits.
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Compensation Analysis
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Definitions
– 25th percentile: The point at which 75% of
organizations pay more and 25% pay less.
– 50th percentile: The point at which half of organizations
pay more and half pay less.
– 75th percentile: The point at which only 25% of
organizations pay more and 75% pay less.
– Compa-ratio: An employee’s current salary divided by
the midpoint of the salary range.
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Salary Range Development
• New salary schedules and ranges were developed
in order to best reflect:
– Market-competitive pay levels for District jobs
– Job classifications and functions
– Organizational hierarchy
• Two salary schedule approaches are presented for
the District’s consideration:
– Blended open range and step schedules for
teaching-related staff only
– Comprehensive step schedules
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Salary Range Development
Example
Title: Job XYZ
Market Median: $35,450
Grade
Minimum
Midpoint
Maximum
1
$24,778
$30,972
$37,166
2
$27,398
$35,618
$43,837
3
$31,508
$40,960
$50,413
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Benefits Cost Analysis
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The cost of the District’s employee benefits
package will be compared to market-competitive
data.
– For medical and medically-related benefits, it is
most accurate to utilize a fixed cost per employee
to estimate the cost incurred
– For other benefits, including paid time off and
retirement, a percent of the incumbent’s base
salary is the most appropriate metric
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Total compensation will also compared to the
market.
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Preliminary Results
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Results – Salary
Actual Annual Base Salary Compared to Market 50th Percentile Base Salary
St. Joseph School District Actual Annual Base Salary
125,000
100,000
St. Joseph Base Salary
Market Base Salary
Linear (St. Joseph Base
Salary)
75,000
Linear (Market Base Salary)
St. Joseph School District
Salary Trendline Equation
and R-Square:
50,000
y = 1.00x - 1,979.97
R² = 0.90
25,000
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0
0
25,000
50,000
75,000
Market Base Salary
100,000
125,000
Results – Salary
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Comparative Salary Analysis
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Many employees fall within the proposed salary ranges for
their jobs.
The average overall compa-ratio is approximately 92%,
indicating that employees, in general, receive salaries
below the market 50th percentile.
Blended Schedule
Below Salary
Approach
Range Minimum
Adjustments
Step Schedule
Approach
Adjustments
Number of
Employees
451
522
997
Total Amount ($)
2,117,784
1,032,495
3,761,899
Total Amount as a
% of Payroll
3.3%
1.6%
5.8%
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Results – Benefits
Market-Competitive Benefits
Data
Actual Benefits Costs
Average
Annual Dollars/
Employee
Percent of
Payroll
Average
Annual Dollars/
Employee
Percent of
Payroll
Medical and Medically-Related
Payments
$6,878
12.7%
$7,717
19.5%
Retirement and Savings
$7,510
12.0%
$4,519
11.4%
$840
1.6%
$0
0.0%
Benefit Categories
Miscellaneous Benefit Pay
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Results – Stipends and Extra Duty Pay
Administrator Stipend*
Travel
Longevity
Doctorate
Head Coach
Assistant Coach
Sponsor (Club-Related)
Sponsor (Music-Related)
Peer Districts Average
$5,487
$2,806
$6,060
$3,500
$5,449
$3,799
$2,313
$3,206
* The Administrator stipend reported reflects a greater number of the custom school district participants,
and peer district employees, than the underlying unique stipends. As a result, the sum of the unique
Administrator stipends is not equal to the total average stipend. Among the peer districts, Administrator
stipends are provided to Director and Assistant Director and comparable positions.
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Results – Total Compensation
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Comparative Total Compensation Analysis
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–
On average, employee salaries are slightly below the
market median, while benefits are well aligned with market.
As a result, the competitiveness of total compensation falls
between that of salaries and benefits. The average comparatio is approximately 94%.
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Recommendations and Next Steps
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Recommendations
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Review and adopt the proposed market-based salary
schedules.
Implementation of the compensation plan should occur
uniformly across all positions. While different
implementation scenarios may recognize budget
constraints, partial or sporadic implementation can result in
pay equity issues.
Update schedules annually.
Perform a comprehensive market review every 3 to 5
years to ensure that the salary ranges remain marketcompetitive.
Periodically assess benefits offerings to ensure that the
employer cost is market-competitive and fiscally sound and
that the benefits provided by the District are of value to the
employees.
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Next Steps
1. Review the compensation results, determine the
preferred salary schedule approach and identify
any final revisions due to internal equity and
unique District considerations.
2. Finalize project deliverables.
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Questions?