Compensation Study
Preliminary Results Overview
Presented by:
CBIZ Human Capital Services
October 26, 2015
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
• Outline recommendations and next steps
• Answer your questions
3
Introduction
The District has asked CBIZ to review current
practices and recommend improvements related to:
•
•
•
•
Job classifications and descriptions
Current compensation compared to market
Internal equity assessments
Compensation policies and procedures
4
Methodology
5
Project Steps
1.
2.
3.
4.
5.
6.
Planning Meetings
Job Evaluation
Compensation Analysis
Salary Schedule Development
Benefits Cost Analysis
Policy Review and Recommendations
6
Job Evaluation
●
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.
7
Job Evaluation
●
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
8
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
9
Compensation Analysis
Custom Survey – Peer Districts
•
•
•
•
•
•
Blue Springs*
Center*
Independence*
Lee’s Summit
Liberty*
Kansas City*
* Survey participant
•
•
•
•
•
•
North Kansas City
Park Hill*
Platte County*
Raytown*
Raymore-Peculiar*
Smithville*
10
Compensation Analysis
●
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.
11
Compensation Analysis
●
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.
12
Compensation Analysis
●
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.
13
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
14
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
$50,413
15
Benefits Cost Analysis
●
The cost of the District’s employee benefits
package will be compared to market-competitive
data.
– For medical and medically-related benefits, it is
most accurate to utilize a fixed cost per employee
to estimate the cost incurred
– For other benefits, including paid time off and
retirement, a percent of the incumbent’s base
salary is the most appropriate metric
●
Total compensation will also compared to the
market.
16
Policy & Procedure Review
●
●
●
●
●
●
●
Setting new hire pay
Adjusting pay for promotions, demotions and lateral
transfers
Job classification process
Assigning new and revised jobs to salary ranges
Salary range adjustments
Salary increase planning
In-range pay progression
17
Preliminary Results
18
Results
Actual Annual Base Salary Compared to Market 50th Percentile Base Salary
St. Joseph School District Actual Annual Base Salary
125,000
100,000
St. Joseph Base Salary
Market Base Salary
Linear (St. Joseph Base
Salary)
75,000
Linear (Market Base Salary)
St. Joseph School District
Salary Trendline Equation
and R-Square:
50,000
y = 1.01x - 2,820.76
R² = 0.87
25,000
19
0
0
25,000
50,000
75,000
Market Base Salary
100,000
125,000
150,000
Results
●
Comparative Salary Analysis
–
–
Many employees fall within the proposed salary ranges for
their jobs.
The average overall compa-ratio is 93.9%, indicating that
employees, in general, receive salaries below the market
50th percentile.
Below Salary
Range Minimum
Above Salary
Range Maximum
Number of Employees
398
179
Total Amount ($)
1,972,169
1,210,613
Total Amount as a % of Payroll
3.0%
1.9%
20
Results
●
Comparative Salary Analysis
–
–
In addition to simply adjusting employees to minimum, the
District will continue to recognize education and experience
for teaching positions.
The District may consider further adjustments to address
compression and internal equity issues.
21
Results
●
Comparative Total Compensation Analysis
–
–
On average, employee salaries are slightly below the
market median, while benefits are somewhat above
market.
As a result, the competitiveness of total compensation will
fall between that of salaries and benefits.
22
Recommendations and Next Steps
23
Recommendations
●
●
●
●
●
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.
24
Next Steps
1. Review the preliminary compensation results and
identify any jobs for re-evaluation due to equity or
competitiveness observations.
2. CBIZ reviews jobs pursuant to District feedback
and revises the recommendations, as
appropriate.
3. Updated study results are presented to the
District for finalization.
25
Questions?