TABLE OF CONTENTS I. Executive Summary 1 Introduction 3 North Carolina’s Compensation Vision Total Compensation 4 Benefits as a Percentage of Average Salary and Wages Salary and Benefits as a Percentage of Total Compensation Economic Review 5 Wage and Salary Trends Consumer Price and Employment Cost Indices Recruitment and Retention Base Pay and Labor Market Analysis 6 Methodology Findings Additional Analysis Longevity VI. Benefits Analysis 12 Paid Time Off Analysis Health Insurance Statewide Flexible Benefits Program (NC Flex) Retirement APPENDIX 15 History of Legislative Increases for North Carolina Employees 1992-2017 North Carolina Pay Comparison to CPI and Average Market Movement Turnover and Aging Trends Market Survey Library List of Benchmark Classes and Labor Market Analysis
Recommendations: Provide resources to fully implement the pending Statewide Compensation Program in order to have a single structure that will support the career needs of the State’s workforce from recruitment to development and retention. Provide resources to implement the revised Salary Administration Policy, which will ensure a fair, equitable and consistently funded mechanism that is needed to progress State employees within their pay grade. Employees need a “line of sight” for career growth and salary advancement. Continue to support Salary Adjustment Fund (SAF) recommendations for critically identified business needs. Consider apportioning future legislative increases using a three-pronged approach to include (1) an across-the-board increase, (2) market-based increase and (3) performance based lump sum payment. To ensure market-related competitiveness, State leaders should continue to charge the Office of State Human Resources (in consultation with the Office of State Budget and Management) with establishing a process to set priorities and request funding for labor market increases and salary adjustment funds based on criticality, turnover, retention, recruitment difficulties and market position. OSHR and State agencies should regularly evaluate job-specific turnover in order to identify critical needs. Continue to support OSHR in exploring new and innovative pay practices in conjunction with agencies’ Continue to be provide allocations for merit-based bonus to reward employees for performance in addition to market. State agencies completed the second year of using a new performance management system; a merit bonus in 2016 was a step toward aligning pay with performance. Continue to evaluate the use of the longevity bonus as a pay delivery mechanism going forward. Support the ongoing funding of OSHR’s Human Capital Management System, Learning Management System (LMS) and Performance Management components; and the Statewide Compensation System Project’s Market Analysis and Modeling tool (MarketPay) and Position Description Writing and Workflow tool (PeopleAdmin). Support OSHR’s development of an intern program with the community college and university systems that would offer the opportunity to supplement workforce needs while exposing students to State government operations. Support acquisition and implementation of an organizational management tool. Research coordination of post-tax supplemental benefits and consolidate all supplemental benefit plan offerings in a menu approach for portability and cost savings. A consolidation would allow employees to see all benefits offerings in one place and select plan products that meet their needs. II. INTRODUCTION This report conveys economic and pay trends, findings and data derived from compensation and benefits surveys that the Office of State Human Resources regularly analyzes to determine
Acceptable turnover rates need to be determined within classifications, within agencies or within locations. These rates can be affected by many factors and need to be documented. Charts showing turnover and workforce age trends are included in the appendix of this report. Longevity Currently the State pays a longevity bonus to career employees with more than 10 years of service. As this is a “time in service” benefit with no basis in market or performance, the practice could be reevaluated in concert with market-based changes going forward. About 41% of employees subject to the State Human Resources Act are currently eligible for longevity bonuses at a cost of nearly $48 million per year. North Carolina pays the average State employee a $1,392 longevity bonus. This is based on a graduated percentage-based schedule starting at 1.50% of annual salary for 10 years of service and increasing every five years to 4.5% for 25 years of service. Table 6 shows that N.C.’s longevity bonus program is extremely generous compared to other Southeastern states. Table 6: A Comparison of Longevity Pay Practices Among Southeastern States Minimum # Years to Qualify for Longevity Starting Longevity Amount Formula for Increase in Maximum Longevity Amount Alabama 5 $600 Time-based, set lump sums $1,000 Arkansas 10 $600 Time-based, set lump sums $900 Georgia No response Kentucky No response Louisiana No statewide longevity program but agencies may implement Mississippi No response North Carolina 10 1.5% of annual salary Time-based, increased percentage of base pay No Maximum (4.5% of annual salary) South Carolina No response Tennessee 3 $300 set lump sums ($100 per year of service) $3,000 Virginia No response West Virginia 3 $180 Time-based, set lump sums ($60 per year of service) No Maximum (likely tops out around $1,800 for 30 years of service based on formula) Source: 2016 NCASG Survey
Job Title Number of Employees Base Salary Avg Market Base Salary Avg Labor Market Pay Gap FY16/17 Turnover Rate ADMINISTRATIVE SUPPORT Office Assistant IV 833 34,888. 38,119 -9.26% 10.10% Executive Assistant I 40 45,558. 59,916 -31.52% 15.80% AGRICULTURAL, ENVIRONMENTAL AND SCIENTIFIC Chemist I 32 50,326. 60,778 -20.77% 6.30% Forester I 25 40,521. 42,043 -3.76% 0.00% EDUCATION AND TRAINING Staff Development Specialist II 38 49,586. 59,468 -19.93% 14.70% ENGINEERING Architect 22 77,248. 82,289 -6.53% 16.70% Engineer 1207 71,288. 70,612 0.95% 15.90% FINANCIAL & BUSINESS MANAGEMENT Accountant 256 62,424. 62,845 -0.67% 7.10% Accounting Technician 368 40,223. 42,058 -4.56% 9.60% HUMAN RESOURCES Personnel Analyst II 65 60,623. 66,175 -9.16% 7.70% HUMAN SERVICES Social Worker III 126 47,953. 57,272 -19.43% 7.30% Staff Psychologist 87 59,200. 90,702 -53.21% 16.10% INFORMATION, COMMUNICATION AND MEDIA Information and Communications Spec II 46 49,115. 56,897 -15.84% 19.60% INFORMATION TECHNOLOGY Business And Technology Applic Analyst 390 77,661. 84,777 -9.16% 7.30% INSTITUTIONAL SUPPORT Cook II 134 29,331. 28,973 1.22% 13.70% Housekeeper 422 26,150. 25,256 3.42% 12.30% LAW ENFORCEMENT AND PUBLIC SAFETY Correctional Officer II* 3446 34,528. 35,076 -1.59% 22.40% Public Safety Officer 70 39,070. 50,925 -30.34% 10.00% LEGAL Attorney III 132 89,454 $106,257 -18.78% 5.88% Paralegal 5 45,845. 61,784 -34.77% 0.00% BENCHMARK CLASSES (cont’d) Labor Market Data Summary (State Agencies Only, Does Not Include Universities)