1. University Budget Office (UBO)
Compensation
Two-Year Timeline
Betsy Larson/Jen Geary
September 19, 2018
University Budget Office (UBO)

2. Workplace Trends Overall Trends:
Unemployment at a 30 year low - 3.9% (as of July 2018)
Indiana nearing an all time low unemployment rate - around 3.4%
Labor market is tight and projected to be so for foreseeable future
46% of US employers are currently experiencing talent shortages
60% of all employers have job openings for 12 weeks or longer
10,000 baby boomers retiring every day or 4 million people a year

3. Wage and Salary Trends General Industry: Higher Education:
Wage growth expected to gain momentum in 2018
Organizations that continue to keep wages below market will struggle with employee attraction and retention
Recent WorldatWork Salary Budget Survey is projecting 2019 salary budgets to average 3.2%
Higher Education:
Overall median salary increases for professionals in higher education over past year - 2.2%
Overall median salary increase for staff in past year - 1.9%

4. IU Compensation Committee
Representatives from the OVPHR and OVPCFO meet to discuss industry trends and IU initiatives having (or will have) an impact on University compensation and benefits.
Sub-committees appointed to draft the University salary policy and create compensation models as needed
What’s changing with 2-year budgets?
The next salary policy will apply to FY20 and FY21
Fringe benefits will be distributed for FY20 and projected for FY21
Phased approach to address hourly minimums

5. Low-earner Approach Background:
Applies to all appointed faculty and staff employees; temporary, student, and dually-employed employees excluded
All appointed faculty and staff employees below $15/hour will be brought to the new minimum by FY 2022
Employees continue to be hired at less than $15/hour
Estimated number of employees – 1,100
825 are union employees

6. New $15/hour Minimum - Impact
Phase I – Raise appointed faculty and staff to new minimum
Move minimum pay rate over 3 year period
FY $12.33/hour
FY $13.66/hour
FY $15.00/hour
Consider financial impact on all campuses and spread cost
Develop the Salary Guidelines:
All applicable employees must be budgeted at new minimum rate in each fiscal year and at $15/hour in the FY2022 budget
During each FY low-earners receive the budgeted increase plus a flat amount up to $624. The increase will be limited to the amount needed to reach $15/hour.

7. New $15/hour Minimum - Impact
Phase II – Salary Compression
Assess and address salary compression issues for lower wage earners after implementation of new Job Framework – projected to be October 2019
Utilize new market ranges assigned by role to:
Determine where compression exists
Set guidelines for determining additional increases
Assess cost to University and Campuses
Recommend approach for addressing

8. Low-Earner Cost by Campus
Total Cost over next 3 fiscal years:
$4.7M (including benefits)
$3.4M (not including benefits)