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Study proposes improvements to state pay plan

Study proposes improvements to state pay plan

Looking 'to move from talk to action'

July 31st, 2016 by Bob Watson in Local News

Missouri's Capitol in Jefferson City

Photo by News Tribune file photo

A new salary and benefits study for Missouri state employees confirms something most already knew: At an average $37,476 a year, Missouri state workers' annual pay ranks last among the 50 states.

But, the report noted: "CBIZ strongly cautions against basing decisions on this comparison alone. Average pay may be impacted more by staffing strategies than actual market competitiveness.

"For example, a state may contract with a services organization for cafeteria and custodial functions, thereby eliminating a significant portion of their lower-wage workforce and raising the average pay for the remaining employees.

"In addition, the state primarily competes against Missouri private industry and local governments for talent" — and not against the other state governments that were studied.

The survey also found less disparity between Missouri's pay and others at the lower end of the pay ranges and more disparity — but affecting fewer people — at the higher end.

The state paid $324,750 to St. Louis-based CBIZ Human Capital Services to study Missouri's pay and benefits and compare those costs with other states and the private sector.

The study also didn't look at all state employees.

Instead, it only covered 37,906 of Missouri's 50,324 active, permanent employees on the state central payroll in jobs located throughout the state.

In a footnote, the study reported: "Practical constraints, including the financial limitations of the study and the lack of comparable private sector employment for certain public sector jobs, prevented a comprehensive evaluation of all statewide job titles.

"The following positions were not included in the pay study:

"All of the positions within the legislative and judicial branches of government.

"All of the positions within the offices of the statewide elected officials (governor, lieutenant governor, secretary of state, state auditor, state treasurer and attorney general).

"All of the positions within the Department of Conservation.

"All of the positions within the various state colleges and universities.

"All of the positions within MOSERS, (Missouri Consolidated Health Care Plan), and other benefit administrators.

"Positions outside of the Uniform Classification and Pay (UCP) System in the following agencies: (Insurance), OA/Ethics Commission, and DNR/Petroleum Storage Tank Insurance Board.

"Certain positions within (Labor)/Division of Worker's Compensation (administrative law judge, chief administrative law judge and chief legal counsel).

"The majority of unclassified and exempt positions within Merit agencies and UCP Non-Merit agencies, respectively (for many of these titles, individual positions within the same job title are used in a wide variety of ways, making it impracticable to gather salary data and complete an effective analysis).

"Certain job classes within the following agencies: (elementary and secondary education), higher education, (Public Safety)/Missouri Highway Patrol, (Transportation) and the state public defender's office. A comprehensive evaluation of all statewide job titles was not feasible due to financial limits."

In its 25-page report, CBIZ noted its study was based on "the three most important labor market characteristics — the size of the organization, geographic scope and industries from which the state recruits talent. Because surveys focus on different market characteristics CBIZ determined each characteristic as it relates to each position at the state before conducting the market analysis."

As required by the state's contract, the study looked at "comparison base salary data for positions matched to peer roles for the surrounding eight states — Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas, Nebraska and Iowa" — as well as similar positions in private industry and businesses.

After making those comparisons, the survey determined Missouri's workers are paid on average 10.4 percent below market rates.

When looking only at "total cash compensation," which was defined as "the sum of base salary and incentives" — and the state doesn't offer pay incentives, the report said — Missouri government workers earn on average 12.6 percent below market values.

But the Legislature authorized the survey because a number of people have argued over the years that Missouri government's benefits package is better than many others.

And that is true, the report said.

"The benefits offered by the state are above market and improve the overall market position of the state," the report said. "However, state employees remain 4.6 percent below market when totaling base salary, incentives and benefits."

Current state law requires the same pay for the same job, no matter which part of the state that job is in.

But, the CBIZ study reported: "The market rate for a given job does not exist uniformly across the state due to local labor market dynamics.

"CBIZ analysis suggests that if this (state prohibition against pay differentials) were removed, the state could implement geography-based wage structures to better align with the respective work location labor markets, many of which are considerably below the statewide average."

Still, the survey showed, a number of state employees are below the minimum level the survey established for their jobs, and the CBIZ study calculated it would cost $13,690,388 to bring 5,050 state employees — now being paid below that threshold — up to the market minimum of their respective proposed ranges.

The report added: "CBIZ does not recommend changing salaries for any employees paid above the minimum."

The state's contract requires CBIZ to make several presentations about its report and answer questions.

Those have not yet been scheduled.

Rep. Jay Barnes, R-Jefferson City, has been a member of the Legislature's Interim Committee on State Employee Pay.

"I look forward to reviewing the study in detail," he said.

"Its top-line conclusions, however, confirm what we've known: Missouri state employees are underpaid. To remain competitive, we need to continue our recent progress of steady pay increases."

The study included the 2 percent across-the-board state pay raise that went into effect July 1.

Sen. Mike Kehoe, R-Jefferson City and a former Interim Committee member, said: "I look forward to closely examining the data and recommendations, then developing and implementing a plan of action with my colleagues in the legislature and the new administration.

"Missouri's state employees are its number one asset, and these employees have grown weary of decades of political-speak about improving their pay.

"This study will provide a mechanism to move from talk to action."


2016 State of Missouri Compensation and Benefits Study