Compensation Studies GFO AZ Conference February 16, 2012 Patty Goodwin Director of Surveys

Who is MSEC? Founded in 1939 to serve the needs of the business community. MSEC membership includes over 3,000 employers in the Rocky Mountain Region. Began conducting compensation and personnel practices surveys in Over 300 surveys and special reports are conducted and published annually for MSEC members.

Quality of Survey Reports Publication Organization Methodology Definition of Terms Reported Statistics Survey Publication Data Salary surveys are a part of the compensation design process

Quality of Survey Reports Participant Base Job Matches Sample Size Trends Customized Reports / Extracts Salary surveys are a part of the compensation design process

Salary Web Sites Host of the Site Purpose of the Site Customer – Employer or Applicant/Employee? Data Sources and Methodology

Unemployment Rates Source: U.S. Bureau of Labor Statistics

Arizona Jobs by Industry Net Annual % Change in Jobs from Dec 2010 – Dec 2011 Projected Job Gains/Losses 2010 to 2012 (Percent) Source: Arizona Department of Administration Education/Health Services Manufacturing Leisure /Hospitality Natural Resources & Mining Trade/Transportation/Utilities Financial Construction Professional/Business Services Information/Telecommunications Government

National Employment Projections Source: U.S. Bureau of Labor Statistics

Employment Cost Index (ECI) Source: Bureau of Labor Statistics 12 Months Ended Wages & Salaries Dec 2010Dec 2011 Private Industry Workers1.8%1.6% Manufacturing1.7%1.8% Service-providing industries1.8% 1.6% Mountain Region1.6%1.3% State/Local Government Workers1.2%1.0% Phoenix1.6%2.0% Total Compensation Private Industry Workers2.1%2.2% Manufacturing2.8%2.8% Service-providing industries2.0% 2.0% Mountain Region1.6%2.2% State/Local Government Workers1.8%1.3% Phoenix2.3%2.8%

Consumer Price Index Pay Increases vs. CPI Source: Bureau of Labor Statistics; MSEC Surveys Phoenix Pay Incr Phnx CPI US CPI % 0.6% 1.6% Proj % 2.2% 3.2% Proj % % 2.3%

Pay Increase Comparison Increases include pay freezes. Source: MSEC Compensation/Planning Packet Surveys

Pay Freezes Source: MSEC Compensation/Planning Packet Surveys

Primary Basis for Pay Increases Data extracted from 2011 MSEC Miscellaneous Benefits/Pay Practices Survey.

2011 Arizona Benchmark Compensation Survey Survey Summary Jobs Surveyed: 379 Job Published: 49 # Participants: 27 # Employees Reported: 1,306 Data Effective: 3/1/2011 Data Collected: –Base Salaries –Formal Range Structure –Annual 2010 Incentive Paid –Target Bonus % –Exemption Status Wage Summary Executive –5 positions published –Average salary $151,063 Managers/Supervisors –10 positions published –Average salary $66,533 Professional –11 positions published –Average salary $56,140 NonExempt –16 positions published –Average $38,158 Hourly Production/Maint. –7 positions published –Average wage $33,888

Employer Costs Per Hour Worked Source: Bureau of Labor Statistics Third Quarter 2011

Employer Costs Percent of Total Compensation Source: Bureau of Labor Statistics Third Quarter 2011

2012 Staffing Plans Data extracted from MSEC 2011 Planning Packet; data effective August 2011.

2012 Cost Reduction Efforts Data extracted from MSEC 2011 Planning Packet; data effective August 2011.