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2/6/2020 - Meeting MinutesPage 1 of 6 Minutes Meeting Citizens’ Compensation Advisory Committee February 6, 2020 Members Present: Frances Hume (by telephone) Marlene Sloan (by telephone) Jeff Worthington Ray Schelbe Mike Terry Brandon Dew Members Excused: Jeff Herring Staff Present: David Salazar, City Compensation Administrator Carolyn Campbell, Benefits Program Manager Guests: Lia Santos, Mercer Allie Wisialowski, Mercer David Paul, Mercer Steven Winters, SLPA Val Thometz, Firefighters Local 81 Scot Baskett, Firefighters Local 81 Ben Luedtke, City Council Staff Jaysen Oldroyd, City Attorney’s Office Dave Buchanan, HR Business Partner Lisa Duckworth, HR Business Partner A recording of these proceedings is on file and available by request from the SLC- HR Department. Meeting Open & Welcome: Chair Frances Hume joined and directed the meeting via telephone. Frances noted all members were present except Jeff Herring, who previously notified the committee he would be absent from this meeting. Marlene Sloan also participated in the meeting via telephone. Frances noted review and approval of the minutes from the meeting held on 1/23/20 will be postponed until the next meeting. Public Comment: None. Presentation & report on results and findings of 2020 AFSCME jobs national wage survey conducted by Mercer (Atlanta, GA) survey team: Frances noted prior to Mercer’s presentation to the committee, the survey team presented and reviewed the same report to AFSCME board members. The Mercer survey team introduced themselves to members of the committee by name, including: Lia Santos, Principal; Allie Wisialowski, Senior Associate; and, David Paul, Senior Analyst. Lia Santos noted Mercer is a global Human Resources consulting company and mentioned she, along with members of her team, have specific experience conducting similar surveys for fire, police, government agencies, as well as other industries. In addition to hard copies of the main report, members were also emailed electronic copies of the full report including appendices prior to the meeting. Lia outlined the background and scope of the report as detailed on p. 3, including: - Mercer partnered with the city to conduct a compensation study of 42 jobs covered under the City’s collective bargaining agreement with AFSCME. - The city was considered unique among other Utah cities, distinguished not only as the state’s capital city, but also based on traits and characteristics such as: population, airport size, commuters, special events, etc. Due to SLC’s unique qualities, the City’s stakeholders wanted to ensure that public employees’ Page 2 of 6 compensation is competitive with other U.S. cities with similar characteristics. The purpose of this study is to compare SLC compensation and Supplemental Pay programs (e.g. Longevity Pay) with the market. - Lia noted the study is made up of two components –a custom survey of comparable US municipal governments and a comparison to published survey data from nationwide compensation survey databases. o The custom survey was completed with a similar methodology to the Public Safety Salary Survey conducted by Mercer on behalf of SLC in March 2019. o Compensation surveys published by Mercer and Willis Towers Watson were used, as available, to supplement the custom survey data. Allie Wisialowski introduced and outlined the custom survey methodology, including criteria and selection of cities invited to participate in the survey, as follows: - (p. 5) Mercer met with AFSCME in October 2019 to select the comparable cities to solicit for participation in the compensation survey. The objectives for city selection were to: o Identify cities that are most comparable to SLC based on a variety of identified criteria. o Include cities talent competitors for the SLC AFSCME positions that are included in the study. o Develop a comprehensive list of cities to ensure meaningful and statistically relevant results. o Maintain consistency in participation from Public Safety Salary Survey, in order to utilize contacts and relationships built with these participants. o Specifically identify relevant talent competitors for positions in this study. This varies in some cases from the Public Safety Salary Survey due to the difference in positions across these two surveys. - (p. 6) Cities selected for participation were chosen based on the following methodology: o Started with the list of cities solicited for participation in the Public Safety Salary Survey. o Added cities considered comparable to SLC in terms of population and those recommended by AFSCME representatives. o Limited selection of cities based on population of approximately ½ to 2.5x the estimated daytime population of Salt Lake City, which is 350,000 when commuters, events, etc. are taken into consideration. Ultimately, the recommended population range for this study was 175,000 to 875,000 people. o Researched a variety of criteria identified to be important when considering similarities across cities for AFSCME positions (Appendix A of the report details all criteria researched). o Identified which factors were Key Criteria when comparing AFSCME positions across cities. o Developed list of recommended cities that fell within the employee population size range and met at least three of the five Key Criteria. o Two exceptions in terms of population size were Phoenix, AZ and Austin, TX, which have significantly higher populations than Salt Lake City. Both are considered direct talent competitors for SLC AFSCME positions. Due to this, Mercer still recommended soliciting them for participation. - (p.7) Mercer ultimately solicited participation from the following 44 cities, which have a median population of ~448,000. - 43 cities Mercer researched fit at least three of the five Key Criteria plus at least two other criteria. o Two cities Mercer researched that fit at least three of the five Key Criteria were excluded after discussion and upon the request of AFSCME representatives: New Orleans, LA and Baton Rouge, LA. - Five cities met two of the five Key Criteria and at least two other criteria. Mercer discussed these five cities with AFSCME and made the ultimate recommendations: o three of these cities were selected for inclusion: Colorado Springs, CO; Long Beach, CA; and Spokane, WA o two cities were excluded upon AFSCME’s request: Boise City, ID and Lincoln, NE. - (p. 8) Mercer and AFSCME also identified cases where some selected jobs may be covered by a separate public entity from a city’s municipal government, including water districts and airports (refer to list of 13 water districts and airports who were solicited for participation). Among these, only the Port of Portland responded to the survey. Page 3 of 6 COMPENSATION ANALYSIS - (p. 9) Ultimately, including Salt Lake City, a total of 15 organizations participated in the survey. The table included on p. 9 of the report shows all cities who were invited to participate; highlighted cities are those who responded. - Allie specifically noted that not all organizations answered all survey questions, so sample size varies by question. Since the City of Portland did not participate, all responses in the report noted for Portland come from the airport associated with the Port of Portland. - (p. 10) Mercer collected compensation information for a total of 42 AFSCME jobs, which fall into three bargaining units: o Trade & Craft, Semi-Skilled, and Non-Skilled: 22 jobs o Clerical and Operations Support: 11 jobs o Paraprofessional & Technical: 9 jobs - The full list of selected jobs is included in Appendix B. - Job descriptions were provided to survey participants to ensure that the data they provided was for the same job as that found in the City. - Mercer collected the following annualized compensation elements to compare to Salt Lake City: o Minimum of Base Pay Scale o Midpoint / Middle of Base Pay Scale o Maximum (Top Out) of Base Pay Scale o Actual Median pay of Incumbents in Job - Mercer compared Salt Lake City’s compensation to the 25th percentile, median (50th percentile), 75th percentile, and average reported data point for each of the compensation elements to understand where Salt Lake City falls compared to the other 14 participants. o For summary purposes, Mercer considers the median the “market rate” of each element. As such, Mercer has expressed Salt Lake City’s pay as a percentage of market median throughout this report. - In accordance to Mercer’s standard reporting guidelines, for each data element: o Average data is reported when there are 3+ observations o Median data is reported when there are 4+ observations o 25th percentile and 75th percentile data is reported when there are 5+ observations - As career progression for the selected jobs is typically based on an incumbent’s time in the role, Mercer also collected information on how long it takes an individual to reach the midpoint and maximum of their base pay scale. o The comparison of this information to SLC will help the City understand if employees are moving through their base pay scales at a market-aligned pace. - Finally, the survey collected information on Supplemental Pay practices, such as Longevity Pay and Standby Pay, to help SLC assess these programs’ competitiveness with those of peers. COST OF LABOR ANALYSIS - (p, 12) Allie explained Mercer’s approach to analyzing the impact of cost of labor between Salt Lake City and the comparable cities. She noted standard practice is to compensate employees based on cost of labor (market-based pricing) rather than cost of living. o As noted in the report, cost of living is the cost to maintain a certain standard of living, including:  Groceries  Housing  Utilities  Transportation  Healthcare  Taxes  Entertainment Page 4 of 6 o Whereas, cost of labor is what it costs to actually employ someone in a certain city. Cost of labor is influenced by cost of living, but also includes:  Supply of talent in the city  Demand for talent in the city  Companies in the city (and what they pay)  Desirability to live in the city - (p. 13) Examples of cities where the cost of living typically runs high driven by desirability for their location include Los Angeles and New York City. Because of the high number of workers in the labor pool, cost of labor in these cities may not run as high. In contrast, cities like Houston, TX have a lower cost of living, but fewer skilled workers available in the workforce to fill a local area niche (oil & gas industry), so the cost of labor runs higher. - Allie noted the specific Cost of Living vs Cost of Labor of Participant Cities –Compared to US National Average is shown in a table on p. 13 of the report. - To conduct the cost of labor analysis for this project, Mercer collected cost of labor data for all participants in the compensation survey; aligned locations into “buckets” based on geographic differentials; and, finally, normalized participant data to the Salt Lake City bucket (results shown on p. 15). David Paul introduced the compensation summary for all 42 jobs included in the custom survey. - (p. 17) David described the three categories used for reporting SLC’s alignment to market median are highlighted throughout the report in three colors: Green, indicating SLC’s pay is within +/- 10%; yellow, indicating SLC’s pay is within +/- 10.01 to 15%; and, red, indicating SLC’s pay is within +/- 15.01% or more of market median. - He noted, Mercer considers +/-15% of the market median to be market competitive. - Across all jobs, SLC is well-aligned to market, though competitiveness varies by position. In aggregate, o Trade & Craft, Semi-Skilled, and Non-Skilled: SLC is aligned to market median for each of the compensation elements. o Clerical & Operations Support: SLC’s pay scale minimums are below market median, while pay scale midpoints and maximums as well as actual incumbent pay are aligned to market. o Paraprofessional & Technical: SLC’s pay scale maximums are below market median. Pay scale minimums, pay scale midpoints, and actual incumbent pay are aligned to market. - An example of the specific data and analysis for each job, including in graphic form, is shown on p. 18 of the report. Focus is drawn throughout the report to how SLC compares to market at the 50th percentile for both range and actual pay information. Also, the years for employees to get to midpoint and the maximum pay, respectively. - (p. 20) David reviewed the summary of pay scale (range) data for trade & craft benchmark jobs, noting SLC’s pay scales for Trade & Craft, Semi-Skilled, and Non-Skilled jobs, in aggregate, appear to be aligned to market. - (p.45) In aggregate, SLC’s pay scale midpoints and maximums for Clerical & Operations Support jobs are aligned to market. SLC’s pay scale minimums are below market in aggregate. - (p. 59) In aggregate, SLC’s pay scale minimums and midpoints for Paraprofessional & Technical jobs are aligned to market. SLC’s pay scale maximums for these jobs are below market in aggregate. In direct response to a question from Jeff Worthington, David Paul clarified the pay figures noted for each job are base pay only. When asked by Ray Schelbe if the same pay figures were for full-time employees only, David Salazar added seasonal and part-time employees’ pay is not included in any of the data. Brandon Dew noted the potential challenge the city faces when data shows its aligned to market with respect to actual pay, but not aligned as well at either of the points along the range. Relative to the years required for city employees to reach midpoint and max, David Salazar explained the pay scale for trade & craft jobs is typically faster than most (1.5 & 3 years, respectively); for clerical & operations support jobs is four and eight years, respectively; and, finally, for paraprofessional jobs is three and six years. Page 5 of 6 Mike Terry asked David Salazar what standard the city historically relies on to assess the city’s pay position compared to market. David explained the city typically aims to ensure employee actual pay is no less than five percent below market. David also noted questions about whether employees of survey participants are union-covered or offer guaranteed pay steps were not included in the survey. Therefore, it’s not possible to assess whether the employees from competing cities receive the same pay guarantee SLC offers. Regardless of employee status from one employer to another, David further added the city typically compares pay with all employer types (e.g. sizes, industries, union vs. non-union, etc.) rather than exclude a specific subset because all are considered competitors. In addition to considering the custom survey data, David reminded committee members ultimate consideration for what recommendations they make will need to include the published survey data included in this report, as well as the local area compensation data which will be presented in the next committee meeting. - (p.71) A comparison of supplemental pay programs is detailed in this section of the report. No analysis is provided, but specific responses received from each city are included for review and consideration. PUBLISHED COMPENSATION SURVEY DATA Allie introduced the market data Mercer gathered from published compensation surveys to supplement custom survey data for the 42 selected jobs. - (p. 78) Given many of the jobs have unique responsibilities and/or are primarily found in the public sector, it is expected that a significant portion of the jobs would not have appropriate job matches in traditional compensation surveys. - In identifying market data for each job, Mercer carefully reviewed Salt Lake City’s information about the job’s responsibilities and compared it to job description and career level information in compensation survey jobs. - Mercer considers a survey job to be a strong match when it shares 80%+ of the job’s responsibilities. - Mercer used the following surveys, which offer a very comprehensive set of market data across industries: o 2019 Mercer Benchmark Database o 2019 Willis Towers Watson General Industry Survey’ o 2019 Mercer Total Compensation Survey for the Energy Sector –Used for utilities jobs, as available. - (p. 79) Mercer utilized the National / All Data scope from each source in order to capture all reported data for each position within the survey. This scoping will help SLC understand the broader national US market for these positions. o The national data was adjusted by -5% to take Salt Lake City’s Cost of Labor into consideration (see pg. 15 for Cost of Labor detail). - Mercer identified market matches from these surveys for 21 (50%) of the 42 jobs. - Appendix D includes full details on the survey matches and market data. - Because published surveys report actual employee pay, rather than organizations’ pay plan information, pay scale elements (i.e. “Mid of Scale”) are not reported in these summaries. - (p. 80) In aggregate, SLC’s employee pay for Trade & Craft, Semi-Skilled, and Non-Skilled jobs is aligned to market. o Three jobs are paid greater than 15% above the market median, while one job is paid more than 15% below median. Page 6 of 6 - (p. 81) There were matches in published compensation surveys for only five of the 11 selected Clerical & Operations Support jobs. o Pay for the Senior Customer Service Representative and Warehouse Support Worker –Airport is greater than 15% above the market median, while the Senior Secretary is paid more than 15% below market. - (p. 82) There were matches in published compensation surveys for only two of the nine selected Paraprofessional & Technical jobs. Marlene Sloan asked whether competition for the jobs included in this survey is local or national. David Salazar noted, historically, the market for talent for most AFSCME-covered jobs is drawn from the local area market. Frances asked what, if any, concerns were raised about results of the survey were expressed by AFSCME. David replied noting Mercer did an excellent job of listening to questions and addressing concerns AFSCME board members raised during the entire survey process. No concerns about the process, data, or the report were raised by union members. David noted Mercer will be returning to present its report to the city council on Tuesday, March 24th. Unfinished business: David advised committee members that analysis and work on the local area market pay analyses for SLC jobs was continuing. He is also gathering information and statistics requested by members for review, including update living wage data, 2019-20 salary budget forecast from WorldatWork, criteria used when formulating last year recommendations, etc. He also suggested a 5th meeting date is likely necessary in order for the committee to complete all work necessary to finalize the next annual report. A Doodle poll will be sent to all members to schedule another meeting date. Confirmed meeting dates: - February 20, 2020, 3:30-5:30 PM - May 14, 2020, 4:00-5:00 PM - October 8, 2020, 4:00-5:00 PM Meeting adjourned at approximately 5:15 PM. Minutes approved at February 20, 2020 meeting.