In spite of efforts in recent years to increase their pay, Missouri government workers in 2018 still were — on average — the lowest-paid state employees in the nation, according to a new "Compensation and Benefits Study Report" issued Jan. 31.
Missouri state workers' pay improvements inching alongRead more
The new report, from CBIZ Talent and Compensation Services, made that finding based on a comparison of the "Adjusted Average Annual Pay" (AAAP) among the states.
And, the new report said, the number of Missouri state employees earning less than the minimum pay for their jobs was larger than was reported in a similar, July 2016 study — so fixing the problem of below-market salaries now will be even more expensive.
In its 2016 report, CBIZ Human Capital Services determined Missouri's state workers were paid, on average, 10.4 percent below market rates and remained "4.6 percent below market when totaling base salary, incentives and benefits."
Those numbers were worse in the new study, with CBIZ reporting: "Total cash compensation is, on average, 15.3 percent below market, (while) the benefits offered by the State are 8.4 percent above market and improve the overall market position of the State.
"However, State employees remain 9.0 percent below market when totaling base salary, incentives, and benefits."
Fixing the problem of below-market-paying jobs was calculated to cost $15,906,721 in 2019, compared with $13,690,388 in the July 2016 study.
"This is the result of 6,760 State employees being paid below the proposed pay range minimums," the new study reported, while the 2016 report had said 5,059 state employees were being paid below the proposed pay range minimums.
Gov. Mike Parson's proposed budget for the 2019-20 state business year, that begins July 1, includes a 3-percent across-the-board pay raise for all state employees, plus more money for low-paid Corrections workers.
And more money — up to 15 percent more — to bring about 4,000 state employees up to the "market minimum" pay for their jobs.
Office of Administration Commissioner Sarah Steelman told the News Tribune last week that many "lawmakers recognize — particularly on the CBIZ study — the need to make adjustments when we're paying under what the market is bearing."
She added: "We have to have a better understanding of where we fit in the marketplace, so that we can recruit — and retain — all the good employees that we have. We want to be competitive in the job market — and we compete against everybody in the geographic area in the state of Missouri."
She said that need to understand the competition was one reason the state asked CBIZ for an updated study.
In both the 2016 and 2019 reports, CBIZ noted the state's benefits for employees are a positive.
"Overall, the analysis indicates that the State's benefits program, when compared to the broader market, is competitive with medical benefits — and substantially above market in other areas, primarily with paid time off and retirement benefits," the 2016 report said.
The new report found Missouri government's "benefits (still) are above-market when compared to the broader labor market. However, these benefits do not overcome the deficiencies of below-market base pay and zero bonus opportunity."
Some may think that today's benefits, at 8.4 percent above the market, are less of a "plus" than in the 2016 CBIZ report, which said state employees' benefits were 19.7 percent above the market average.
Both reports caution averages can be misleading, and the new CBIZ report includes the note: "Average pay is not an apples to apples comparison, because different states provide different services."
The new report also contains the same caution as one in the 2016 report, "against basing decisions on this comparison alone. Average pay may be impacted more by staffing strategies than actual market competitiveness."
State Budget Director Dan Haug said last week the state's competition for jobs varies depending "on the type of job. If there's a demand for specific types of jobs — like, I think probably IT (information technology) — it's harder to compete in those areas, because there are more people wanting to hire IT-like people."
Since 2015, the CBIZ studies showed, overall turnover among state employees has been at least 18 percent — and it was 21.8 percent last year.
"I think all of this is trying to lower that turnover rate," Haug said. "Obviously, it's never going to go to zero.
"But we would like to lower it, because it does lower things like training costs and overtime — if you have a position that's vacant for awhile, other people may have to work overtime to pick up those job duties."
More experienced workers also mean better productivity, Haug noted.
When he still was in the state Senate, now-Lt. Gov. Mike Kehoe was a member of a special Interim Committee on State Employee Wages.
Kehoe told the News Tribune on Friday: "The interim committee understood increasing state employee pay will be a multi-year process, which also includes better understanding the importance of state employees and the work they do, as well as providing a mechanism for rewarding employees based upon their performance."
The state paid nearly $325,000 in 2016 to CBIZ Human Capital Services for the first report.
The new report cost another $235,000, OA reported.
Even though the total number of state employees was down, 10 of the departments and OA reported more jobs that were paid below the minimum recommended salaries in 2019 than in 2016.
Parson's budget proposes cutting more than 400 jobs from the state's payroll, but targets positions that currently are vacant.
That would be the latest reduction in a series of job cuts that began more than a decade ago, during the Matt Blunt administration, and continued during most of Jay Nixon's eight years as governor.
Haug and Steelman said there's no guarantee there won't be more job reductions in the future.
"There are going to be certain things that we can do more efficiently (with fewer employees) as technology evolves," Haug explained, "(and) I think we're in a position where we can do that through attrition, retirements and that kind of thing. I don't see layoffs going forward."
Steelman said: "Gov. Parson doesn't want to expand government.
"(But) he does value the human capital (and) he values state employees."
This week, the House Budget Committee is expected to begin its final markup of the budget bills before sending them to the full House for debate.
As of last week, the governor's pay proposals had not been changed.
Kehoe told the News Tribune: "Gov. Parson is to be commended for taking an important first step in increasing state employee pay with the budget he submitted to the legislature.
"I am pleased that the House budget contains these increases, and I am optimistic the Senate version will retain them as well."