ALBEMARLE COUNTY SERVICE AUTHORITY

Transcription

1 ALBEMARLE COUNTY SERVICE AUTHORITY AGENDA ITEM EXECUTIVE SUMMARY AGENDA TITLE: Compensation Study Recommendations and Approval of Personnel Management Plan (PMP) Amendments STAFF CONTACT(S)/PREPARER: Emily Shifflett, Human Resource & Administration Manager AGENDA DATE: February 16, 2017 ACTION: ATTACHMENTS: Yes BACKGROUND: The firm contracted to conduct the Compensation & Classification Study, Titan Group, LLC, has completed their study and finalized the resulting Competitive Compensation Analysis report. Generally, the ACSA was found to be below the market average by 5.6%, and a new pay structure is being recommended to achieve a market competitive pay structure. A recommendation implementation plan for the suggested pay structure based on the market salary is included in the final report. It is the opinion of the ACSA that the recommended changes can be made within the funding limits already approved in the FY 2017 budget. Voluntary employee meetings were held with the Titan Group and ACSA staff last month to discuss the salary survey and recommendations for the new pay structure. Andy Klein, Titan s lead consultant on the project, will present the Board with the study recommendations. RECOMMENDATION: We are recommending the attached changes to the current pay grade and structure, employee salaries that fall below the minimum salary requirement for their grade to meet minimum salary requirements according to the new, proposed, pay structure which will affect 13 employees and a one time, across the board 2.5% market adjustment. An additional 3% pay pool is being proposed for the FY 2018 budget, and will be presented to the Board for adoption in the June meeting. We will amend other sections of the Personnel Management Plan and those will be presented to the board at the March meeting. BOARD ACTION REQUESTED: It is recommended that the aforementioned changes, attached to this memo, be approved by the Board, with an effective date of March 1, ATTACHMENTS: Competitive Compensation Analysis Power Point Presentation Personnel Management Plan Redline Edits and Resolution AgendaItemExecSumCompStudyRecomm021617

2 Competitive Compensation Analysis ANDREW L. KLEIN, PH.D., PRINCIPAL; FEBRUARY 16, 2017

3 Introduction Key to any successful enterprise is people. And, not just any people. The challenge for Albemarle County Service Authority s (ACSA) management is to find and execute a balance between finding the right skills, at the right level of competence, at a price that is affordable and yet competitive enough to attract and retain talent, while administering the program with transparency and fairness. This study is a building block for this challenge. It will provide information about the competitive market, translate that into a competitive pay structure, and align jobs into that structure. Finally, there will be an examination of how people line up in that structure and if that reveals compression/fairness issues that need to be examined GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 2

4 Project Overview The scope of this engagement included the following objectives: Conduct a salary survey of all job classifications using both a custom survey of peers and published data. Review current classifications and make recommendations for changes. Review compression issues and provide recommendations and associated costs for implementing. Review best practices for a variety of pay components such as on-call pay and sign-on bonuses. Provide employee communications planning, resources and other assistance with the study. Provide participant report. Provide knowledge transfer and coaching to ACSA HR contact GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 3

5 Custom Survey Methodology A custom survey of compensation for 24 benchmark jobs was conducted. The goal was to ensure data on pay competitiveness was gathered from highly relevant, similar industry employers. This is how this was done. ACSA provided job descriptions for the thirty-seven (37) jobs to be market priced using published surveys and the custom survey. A custom survey was designed to collect market data for twenty-four (24) jobs. ACSA incumbent data as well as pay structure details were collected from ACSA s completed survey. Twenty-five (25) organizations were identified by ACSA for inclusion in the custom survey. Participants were promised a copy of the summary data as an appreciation for completing the survey. Fifteen (15) organizations participated, providing adequate data for comparison. ACSA data was excluded from all summary market analysis for this review but is included in the summary data provided to other participating organizations. Summary data provided to participating organizations was not adjusted for the ERI area differential labor cost in relation to ACSA. This is because there are no statistically significant differentials across the participants (See the green-headed column in Table 1, below). ACSA average base salary and salary structure were also compared against a composite market review using published survey sources and the custom survey data GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 4

6 Survey Participants Company/Organization Name City # FTE's Companywide Annual Revenues or Operating Budget Industry sectors Geo. Diff. From Charlottesvill e County of Albemarle Local Govt. Charlottesville $125MM+ Government 1 Henrico County Henrico $1,311,569,642 Government 1.04 Chesterfield County Government Chesterfield $125MM+ Government 1.04 Harrisonburg-Rockingham Regional Sewer Authority Mt. Crawford 1-99 $10MM-$74MM Non-Profit 0.97 Frederick County Sanitation Authority Winchester 1-99 Government 1.02 Loudoun Water Ashburn $10MM-$74MM Other 1.18 City of Danville Virginia Danville $125MM+ Government 0.96 Hanover County Hanover Government 1.04 Rivanna Water and Sewer Authority Charlottesville 1-99 Government 1 Stafford County Government Stafford $125MM+ Government 1.19 Orange Water and Sewer Authority Carrboro Government 1.06 Prince William County Service Authority Woodbridge $75MM-$124MM Non-Profit 1.19 City of Charlottesville Charlottesville - - Government 1 Lynchburg Lynchburg - - Government 0.97 Albemarle County Service Authority Charlottesville 1-99 $10MM-$74MM Government GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 5

7 Methodology Used in the Compensation Pricing Analysis Job Groups Markets/Business Sectors Geographic Reach Top Management Engineering State gov t., Gov t agencies, local businesses (e.g. UVA). Water industry All Industries Sewer and Water Authorities Compensation Market All data aged to January 1, 2017 Philosophy Parameters Mid-Atlantic/ Regional/Local large businesses Organizations of Similar Size of Budget/Scope/ Staff Size EEs. $29 million budget ($20-$45 million) Statewide All sizes Maintenance Construction/Utility Local All sizes Target Salary At market defined as 50 th percentile At market defined as 50 th percentile At market defined as 50 th percentile Non-Exempt Staff Maintenance IT Finance HR Customer Service All Industries Local All Sizes At market defined as 50 th percentile General Support and Clerical Staff All industries Local All sizes At market defined as 50 th percentile 2015 GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 6

8 Published Surveys The market for talent often is more than other utilities. ACSA recruits from and loses people to a variety of employers. Gallagher Titan market priced ACSA jobs to the other comparators identified in the Compensation Market statement. Gallagher Titan supplied the relevant survey data from well-known surveys. Published survey sources included: Mercer Benchmark Survey Salary Assessor (ERI) Kenexa CompAnalyst, Job Analyzer (CA) Towers Watson Salary Survey CompData Benchmark Surveys Each job was compared with jobs in published compensation survey sources based on the descriptions provided by ACSA GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 7

9 Compensation Analysis Findings Custom Survey What this analysis reveals is that, on average, ACSA salaries are 6.8% above market based solely on the custom survey data. This is just slightly above the +/-5% considered at market. But, there is considerable variation within each of the job averages. Using a typical pay range of +/- 20% around the market median 4 jobs are paid, on average, more than 20% above market. Two jobs are paid, on average, this much below market. It is Gallagher Titan s view that the data is rather thin and three of the 24 jobs have insufficient/cautionary data. So while the custom survey provides perspective, Gallagher Titan would not advise viewing this data as either definitive for any job or sufficient for building a solid compensation program GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 8

10 Competitive Market Details Composite Survey Two data collection/market comparison resource approaches were part of this study. One was the custom survey, The other was market pricing using the published surveys. G-T combined the custom survey data and the survey data from published survey pricing. The advantage of the published survey data set is that Gallagher Titan was able to market price all 37 jobs. Data from the custom survey was integrated into the overall data set and treated as a separate and distinct source and weighted equal to a published source. It is Gallagher Titan s view that this is the data set ACSA should use for assessing their competitive position in the market and upon which a pay program can and should be built GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 9

11 Competitive Market Details Composite Market Review - Salaries All data, including custom survey data, was aged to January 1, ACSA salary data was analyzed against future projected market data. The analysis speaks to two issues. 1. One is how well pay (on average for a job) aligns with the market and 2. How well the pay grade for that job aligns with the market. Overall, ACSA average base salaries are 3.9% below the market median. Overall, ACSA salary range midpoints are 5.2% below the market median GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 10

12 Competitive Market Details Composite Market Review Salaries (Continued) There are significant differences across individual jobs and the average salaries of the incumbents in those jobs. Because averages of pay in low incumbency positions may be distorted by new hires with low starting salaries or long term employees with high salaries, ACSA needs to go one step further before applying this data GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 11

13 Proposed Structure Gallagher Titan has built a pay structure. This consists of pay grades, ranges, and midpoints. Once individuals are placed into this structure, then ACSA can see how each person fares against the structure, which is strongly aligned to the market GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 12

14 Proposed Structure 12.5% Midpoint Differential Salary Range # Jobs # EEs Minimum Midpoint Maximum Midpoint Progression Range Spread Min as % of Mid Max as % of Mid $28,800 $36,000 $43, $32,400 $40,500 $48, $36,480 $45,600 $54, $41,040 $51,300 $61, $46,160 $57,700 $69, $51,920 $64,900 $77, $58,400 $73,000 $87, $65,680 $82,100 $98, $73,920 $92,400 $110, $83,120 $103,900 $124, GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 13

15 Illustrative Analytics Job Title # EEs Current ACSA Grade Current ACSA Mid. Proposed Grade Market Base Salary 50th Proposed Mid. Proposed Mid. as % of Market Base 50th Proposed Mid. As % of Current Mid. Meter Technician 5 R1Z2 $36, $36,577 $36, % Utility Worker I 13 R1Z2 $36, $36,281 $36, % Average for All Jobs % 2015 GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 14

16 Forecast for Salary Budgets and Pay Increases ON AVERAGE Summary of 2017 Salary Increase Budget Projections National Median Salary Budget Increase Survey Source Actual 2016 Projected 2017 The Conference Board 3.0% 3.0% Economic Research Institute 3.0% 3.0% Mercer 2.8% 2.9% SHRM 3.0% 3.0% Towers Watson 3.0% 3.0% World at Work 3.0% 3.0% Korn-Ferry/Hay Group 2.8% 3.0% 2015 GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 15

17 Overall Compensation Summary In summary: ACSA salaries are, overall, close to the 50 th percentile of the marketplace. 1. The recommended salary structure is 5.6% above the current ACSA structure. This is about the amount built into the new structure to achieve a market competitiveness pay structure. Adopting the new structure will align ACSA pay structures with the market for On average, individual pay is 4.51% below market and this is the amount Gallagher Titan recommends be in the ACSA 2017 salary budget to achieve competitiveness. Most organizations add about a half percent to this for promotions and equity adjustments that may be needed throughout the year. 3. Overall, ACSA pay range maximums are in line with the market 75 th percentile, which is in line with the ACSA desired plan design GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 16

18 Implementation The ACSA will be asking the Board to adopt the following on February 16, 2017 (to be effective March 1): *The new pay structure and grade recommendations *Adjustment of salaries for all employees that are below the minimum salary requirement for their grade (to meet minimum salary requirements according to the new pay structure). This affects 13 employees. *One time, across the board, market adjustments of 2.5% effective March 1, 2017 and *Propose in the budget a 3% Pay Pool effective July 1, 2017 *By July 1 the total pay pool will be a 5.5% average increase *All employees will receive a personalized sheet showing their specific information regarding the proposed changes GALLAGHER BENEFIT SERVICES, INC. TITAN GROUP, A DIVISION OF GALLAGHER BENEFIT SERVICES, INC. 17

19 Thank You Name Title Gallagher Benefit Services, Inc Main Fax

20 R E S O L U T I O N WHEREAS the Albemarle County Service Authority in 1983 adopted a Personnel Management Plan for the Authority; and WHEREAS the Personnel Management Plan has been amended from time to time by the Board of Directors, having last been amended and re-enacted in December 2016; NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the Albemarle County Service Authority that the Personnel Management Plan of the Albemarle County Service Authority is hereby amended and re-enacted incorporating changes attached hereto. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I, Gary B. O Connell, do hereby certify that the foregoing is a true and exact copy of a resolution adopted by the Board of Directors of the Albemarle County Service Authority in a regularly scheduled meeting on February 16, 2017 by a vote of to. Gary B. O Connell, Secretary-Treasurer

21 APPENDIX CB ACSA CAREER SALARY PLAN PAY RANGES Department Grade Title Minimum Mid-Point Maximum Finance 1 Customer Service Representative $28,800 $36,000 $43,200 Finance 1 Meter Technician $28,800 $36,000 $43,200 Maintenance 1 Utility Worker I $28,800 $36,000 $43,200 Administration 2 Administrative Office Associate $32,400 $40,500 $48,600 Engineering 2 Utility Location Technician $32,400 $40,500 $48,600 Maintenance 2 Utility Worker II $32,400 $40,500 $48,600 Engineering 3 Engineering Technician A & B $36,480 $45,600 $54,720 Maintenance 3 Electrical Pump Apprentice $36,480 $45,600 $54,720 Maintenance 3 Utility Worker III $36,480 $45,600 $54,720 Engineering 4 Sr. Util. Location Technician $41,040 $51,300 $61,560 Finance 4 Sr. Customer Service Representative $41,040 $51,300 $61,560 Finance 4 Accounting Technician $41,040 $51,300 $61,560 Maintenance 4 Crew Leader I $41,040 $51,300 $61,560 Maintenance 4 CCTV Technician $41,040 $51,300 $61,560 Maintenance 4 Electrician/Pump Technician $41,040 $51,300 $61,560 IT 5 Systems Analyst $46,160 $57,700 $69,240 IT 5 SCADA/LAN Technician $46,160 $57,700 $69,240 Engineering 5 Reg. Compliance Spec. $46,160 $57,700 $69,240 Engineering 5 Construction Inspector $46,160 $57,700 $69,240 Finance 5 Meter Operations Supervisor $46,160 $57,700 $69,240 Maintenance 5 Crew Leader II $46,160 $57,700 $69,240 IT 6 Systems Engineer $51,920 $64,900 $77,880 Engineering 6 Civil Engineer $51,920 $64,900 $77,880 Finance 6 Accountant $51,920 $64,900 $77,880 Finance 6 Customer Service Supervisor $51,920 $64,900 $77,880 Administration 7 Human Resources and Administration Manager $58,400 $73,000 $87,600 IT 7 GIS Coordinator $58,400 $73,000 $87,600 Engineering 7 Modeling Engineer $58,400 $73,000 $87,600 Engineering 7 Environmental Compliance Specialist $58,400 $73,000 $87,600 Maintenance 7 Operations Supervisor $58,400 $73,000 $87,600 Maintenance 7 Facilities Supervisor $58,400 $73,000 $87,600 Engineering 8 Sr. Civil Engineer $65,680 $82,100 $98,520 IT 9 Manager of Information Technology $73,920 $92,400 $110,880 Maintenance 9 Operations Manager $73,920 $92,400 $110,880 Engineering 10 Director of Engineering $83,120 $103,900 $124,680 Finance 10 Director of Finance $83,120 $103,900 $124,680 Critical Support Personnel: 92% total range width Min/Max $27,000 $51,912

22 Administrative Associate Position (Working Titles) Customer Service Representative Meter Technician Utility Worker I Technical Personnel: 120% total range width Min/Max $30,300 $66,512 Position (Working Titles) Accounting Technician Construction Inspector Electrician/Pump Technician Electrical Pump Apprentice Engineering Technician A and B Sr. Customer Service Representative Sr. Utility Location Technician Utility Location Technician Utility Worker II SCADA/LAN Technician Professional: 166% total range width Utility Worker III Min/Max $36,700 $97,768 Position (Working Titles) Accountant Civil Engineer CCTV Technician Crew Leader I Crew Leader II Customer Service Supervisor Environmental Compliance Specialist Facilities Supervisor Meter Operations Supervisor Modeling Engineer Operations Supervisor Regulatory Compliance Specialist Sr. Civil Engineer Systems Analyst Systems Engineer GIS Coordinator Management: 147% total range width Min/Max $49,400 $121,885 Director of Engineering* Position (Working Titles) Director of Finance* Human Resources & Administration Manager* Manager of Information Technology* Operations Manager* *Exempt from FLSA overtime provisions. Board Approved 10/16/2014