Albemarle County Compensation Report – March 2004

 

Compensation

 

Background

At the June 26, 2003 Joint Board meeting, the Joint Boards supported staff’s recommendation to “collect and analyze data over the summer, along with the annual salary review and bring a recommendation on the appropriate methodology for determining market competitiveness back to the Boards.”   Several recent issues have emphasized the difficulties of attracting and retaining a highly qualified workforce.  These difficulties include:

 

 

The Joint Board adopted compensation strategy for market competitiveness appears to be successful in recruiting and retaining positions recruited primarily from our local market.  Positions for which we recruit outside of our local market appear to have significant competitiveness issues.

 

At the November 6, 2003 Joint Board meeting, staff was directed to:

 

1) Consider different markets for different positions  Our adopted market may adequately represent our competition for locally recruited positions, but is not competitive for positions recruited in a wider geographic market.  These positions include directors, principals, and other management-level or professional-level positions. Recently, top candidates with significant proven experience have rejected offers due to uncompetitive salary offers. 

 

2) Consider cost of living  The Charlottesville/Albemarle area has a high cost of living. Recruiting employees from outside our geographic area is difficult at current salary levels.  Over the past year, final candidates for teaching positions and management positions have declined offers, often based on lack of affordable housing when compared to salary.  The Charlottesville Metropolitan Statistical Area (MSA) has the 2nd highest cost of living of the eight largest urban areas in Virginia.  Charlottesville MSA is second only to Northern Virginia and the cost of housing (both rental and ownership) is considerably higher than all surrounding areas.

 

Staff has evaluated alternatives and is presenting options in response to the Board’s direction to address these issues.  As competitive salaries are critical for Albemarle County to attract and retain high performing employees, staff has evaluated several options that could be implemented in the short-term. 

 

Ø       Market/Market Positioning

 

The first issue is to determine our market and the desired positioning, relative to the market.   Staff evaluated a variety of methodologies to include:

1)       Peer-ranking in which a national or regional peer group is identified as our market.  This peer group would consist of similar county populations, student enrollments, and cost of living to Albemarle.

·         This option would require that additional data be collected annually, and may be difficult to communicate and administer.

·         Few or no localities in our current market would be in the peer group.

·         Consensus could not be reached on such a different market methodology within the timeframe needed to meet competitive pressures.

2)       Set a different target of our adopted market, such as the top quartile.

·         This option requires no additional data collection, but does not specifically address the high cost of living.

·         This option could be accomplished within the appropriate timeframe.

3)       Select a peer group of localities from our adopted market, based on similar size, cost of living and student enrollment.

·         This option takes into consideration the cost of living and is based on our current market so requires no additional data collection.

·         This option could be accomplished within the appropriate timeframe.

 

Recommendations (market):

Staff recommends selecting identified localities from our adopted market to be used as the competitive market for senior level administrative/management positions, as these are the areas from which we recruit.   To remain consistent with Board adopted strategy, the recommended target is the median of that market.  All localities are within the wider competitive market and include: Hanover County, Loudoun County, City of Charlottesville, Prince William County, Spotsylvania County, Chesterfield County, City of James City County, and City of Roanoke.   These localities represent areas that are in MSAs, both above and below Albemarle.  Three of the localities, Spotsylvania, Prince William and Loudoun, are in the Northern Virginia MSA, which is less than 8% above Albemarle County in cost-of-living.  Charlottesville is within our MSA and has the same cost of living. Two of the localities are in the Richmond MSA, which is approximately 9% below the Albemarle cost of living.  The two tidewater localities, Chesapeake and James City County, are approximately 12% below the Albemarle cost of living. The Roanoke MSA is approximately 16% below the Albemarle cost of living.  Based on targeting the median of these localities, our senior level administrative/management position paygrades are below market from 9.8% to 20.0%. (Attachment #1)

 

Ø       Implementation methodologies

 

Staff reviewed several options to implement the desired market target to include:

 

1)       Create separate administrator/management scale.

·         This requires additional time in administration and communication and would require that a new compensation policy be created.  In addition, creating a separate scale may result in morale issues from other staff.

·         This process could not be accomplished within an appropriate timeframe.

2)       Expand the range spread of our current scale.

·         This impacts all classified employees by increasing the midpoint at all paygrades.

·         This would not specifically target positions which we recruit regionally or nationally.

·         Expanding the ranges of the current scale would not fully address competitiveness issues.

·         Expanding the ranges would not allow for further adjustment to meet market needs.

3)       Add paygrades to current classified/administrative salary schedule. 

·         Increasing the number of paygrades would allow for competitive placement of positions on our pay plan.

·         Continuing with one salary structure is advantageous for ease of communication and administration.

·         This would address competitive scales for the purpose of new hiring.

·         Placement of positions would be relative to market information.

·         Structure would allow for future ability to address competitive issues.

 

 

Recommendations (structural):

Staff recommends that we add paygrades to current classified/administrative salary schedule.  (Attachment #2) Our current structure has 25 paygrades, a 60% spread between minimum and maximum and 7.5% between paygrades.  The structure should be increased to include additional paygrades up to 30.

 

The positions identified as recruited beyond our local market include:

·         22 School Division positions

·         22 Local Government positions

These positions are generally in paygrade 20 and above, but there may be several exceptions.

 

Recommendations (implementation):

In accordance with School Board policy GCBA, and County of Albemarle Policy P-60, Salary Administration and Position Classification “When an employee is reclassified from one range into a higher range, the employee will receive 7.5% pay rate increase for reclassification resulting in a one paygrade increase and a 10% increase for reclassification resulting in a two or more paygrade increase”.

 

Staff recommends that the implementation be phased in over two years, with the increase calculated from the midpoint of the paygrade.  This would involve a waiving of current policy.  However, staff recommends the following implementation strategy: 

·         Two or more paygrade reclassifications-employees to receive 5% of midpoint effective, July 1, 2004 and 5% of midpoint, effective July 1, 2005.  This amount is one-half the required amount (10%) as stated in policy.

·         One paygrade reclassifications- employees to receive 3.75% of midpoint effective, July 1, 2004 and 3.75% of midpoint, effective July 1, 2005.  This amount is one-half the required amount (7.5%) as stated in policy.

 

Summary of all recommendations:

These recommendations are presented to the Boards for their consideration.  It is noted that all final funding is subject to, and based upon, available revenue.   Implementation strategies are being developed within allocations available within each respective budget.

 

1.       For positions that are recruited on a regional/national level, identify competitive market as the identified localities within our adopted market that we typically recruit against for those positions.  This subset of our adopted market should address cost of living issues and target competitive market position.  Further evaluation of our ability to attract and retain highly qualified candidates will be ongoing.

2.       Maintain current salary structure and increase the span of our scale.

3.       Waive policy to allow reclassification increases to be phased in over a two year period.

 

 

Go to attachment 1 - Benchmark positions

Go to attachment 2 - Classified/administrative salary schedule

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