1 Pay Study Review City Auditor’s Office December 8, 2003

2 CWA Pay Study Review Primarily Internal Equity Driven –21 benchmark positions represented approximately 251 position classifications (<10% coverage) –The remaining 230 position classifications were slotted based on management’s job value judgments Employee pay ranges increased 6.2% at midpoints, on average

3 MAP Pay Study Review Primarily External Equity Driven –54 benchmark positions represented approximately 210 position classifications (26% coverage) –The remaining 156 (74%) position classifications were slotted based on management’s job value judgments Employee pay ranges increased 19.7% at midpoints, on average Separately, management position pay ranges increased 24.9% and professional/admin ranges increased 14.6%, on average

4 MAP Cost Factors Salaries are a key expenditure for the City MAP positions represent an annual payroll of more than $19 million (salaries only) –Approximately 354 employees averaging just under $55,000 annual salary Range increases exceed typical market maintenance/COLA range adjustments of 3% by approximately 16% at midpoints Applied to the MAP payroll, the “salary exposure” is increased approximately $3 million annually

5 Alachua County Financial Trends Report

6 MAP Pay Study Review Even though the costs of the proposed MAP Pay Plan are higher than historical patterns, are the increases justified by the pay study results?

7 WorldatWork Information on External Competitiveness Companies need to closely monitor labor costs to make sure that they neither overpay (leading to a higher cost than necessary in providing a product or service) nor underpay (possibly leading to higher turnover, which could hurt productivity). Has the City of Gainesville experienced high turnover?

8 Turnover Analysis

9 Dept. of Labor Employee Turnover Rates Government versus Total Industry and Government November 2001 – October 2002

10 WorldatWork Information on External Competitiveness In general, companies tend to survey other companies similar to themselves in all or some of the following characteristics: size, industry type, geographical location, revenue/income size and required job skills.

11 City of Gainesville Pay Study Assumptions There is a “Gainesville Factor.” We often hear talk of the Gainesville factor.” That is, that over-qualified people work for less in Gainesville because it is such a good place to live. Human Resource professionals have a name for this factor: the cost of labor differential. Therefore, we gave more weight to surveys that included a cost of labor differential. For example, in its published data Mercer takes the market data for each survey data point, and then reduces them by 9-12% to reflect the cost of labor in Gainesville, a direct reflection of the “Gainesville factor.”

12 City of Gainesville Pay Study Assumptions Salary.com professional guidance related to geographical indexing: Data provided represents national averages which are then adjusted to specific metropolitan regions through a geographic differential to reflect differences in pay levels in different cities or geographic areas.

13 Salary.com Information on Industry and Organization Size It is most common for the size of the company to influence the pay levels of more senior employees. If you are looking at a management or an executive position, the size of the company is one key measure to determine pay levels. It is most common for the industry of the company to influence the pay of senior employees and those whose skills are less transferable to other industries. If you are looking at a management or an executive position, the industry is very relevant to how much you're paid. Clerical and lower level positions are, as a rule, affected only slightly.

14 MAP Pay Study Examples Geographic Indexing Industry Type Size of Organizations

15Summary We reviewed the data underlying the market study which led management to recommend increasing MAP pay structures significantly, on average, approximately 20% at midpoint We believe many of the assumptions that led to the City’s determination of market are subjective and that some of the issues raised by our presentation rise to the level of policy decisions With this information, the City Commission can more effectively provide policy guidance to management on general market rate issues, resulting in fair and equitable wages for City employees