Organizations need to establish and periodically update their compensation plans if they want to remain competitive and retain quality employees, consultants advise.
Having a class and compensation plan is important to ensure that the organization is being fair and equitable in how it is compensating their employees, and to ensure that they are competitive within the labor market, according to Jeffrey Ling, executive vice president of Evergreen Solutions, which consults with school districts, cities, counties and states.
Regular updates should reflect changes in both the work content of existing jobs and newly created jobs. They should also reflect changes in the complexity of jobs. That may require the classification or reclassification to ensure equal pay for equal work, according to Earnest Archer, president and chief executive officer of The Archer Co., a human resource consulting firm.
Ling suggests cities do a comprehensive assessment every three to five years, with mini-assessments annually. He advises crafting compensation plans with the philosophy of where the organization wants to be in the marketplace. In other words, "don't look at compensation as a cost but as an investment in talent," Ling advises.
The City of Greenville implemented a new compensation plan last summer. The city spent about a year reviewing its pay structures and conducting job analyses to ensure all job requirements and regulations were up to date, said Greenville Human Resources Director Athena Miller. The city also had a market analysis done to see how it fared among competitors.
"If plans are not reviewed and updated, then we don't know how to project costs, and we stand to lose employees," Miller said.
It's helpful to take an annual benchmark of critical positions to be sure your organization is in step with the market, Miller said. She agreed that a complete review of compensation packages, both pay and benefits, should be conducted at least every three to five years.
If there is high turnover, the organization should assess why and collect data in an effort to stop that trend, Miller said. Cities also should keep an eye on employees who are eligible to retire in order to be prepared and avoid losing institutional memory, she said.
A city invests time and money in training an employee, and the last thing city leaders want is to then lose that employee because his pay was not competitive.
"You don't want to be a training ground for other cities," said Donna Kazia, training coordinator for the S.C. Appalachian Council of Governments, adding that cities should review the Municipal Association's compensation survey to determine if they are competitive.
If class and compensation structures are kept current, it also helps with budget preparation, Kazia said.
"In local governments, anywhere from 72 percent to 77 percent of the budget is in salaries and benefits," she said.
Tips
|
|---|