2. Appalachia Regional Library, North Carolina Board of Directors
PRESENTATION TO
Appalachia Regional Library, North Carolina
Board of Directors
Compensation Study
January 18, 2018
Presenter:
Steven B. Miner, Vice President

3. Purposes for the Study
Responds to changing market conditions and supports the Library’s efforts to attract and retain quality employees
Recognizes changes in employees’ duties and responsibilities resulting from workplace and organizational changes
Ensures internal equity and consistency among similar positions regardless of location
Ensures that salaries are externally competitive with comparable employers

4. Why Do Local Government Entities Conduct Classification and Compensation Studies?
To ensure that pay is competitive with other libraries and library systems having a similar structure
To ensure that salary compression issues are addressed
To aid in reducing employee turnover, resulting in lowered turnover expenses and better levels of service
To ensure jobs are treated in a fair manner and their rankings and pay are based upon a rational system of evaluation

5. Typical Cycles for Classification and Compensation
Many public sector entities conduct studies every five (5) to seven (7) years
Major changes in public and private employment and classification and compensation systems took place in the labor market in the 2003 – 2008 and 2009 – 2012 timeframes
Many locations are recognizing that their classification and compensation systems are in need of assessment and update due to changes in job responsibilities of employees and a shifting labor market

6. Pay Philosophy We Worked Toward
Providing fair and equitable compensation to employees in an increasingly competitive and changing labor market
Establishing fair market value for library jobs
Ensuring that employee compensation reflects changing economic conditions
Providing consistent administration of pay policies and procedures among all library workers

7. Study Methodology
Explanation of SAFE system to Leadership Team and workers at all libraries
Discussions with the Library Director and Surveys of Department Heads
Collection of data
Evaluation of positions
Obtain market salary and benefits information
Development of salary line
Assignment of positions to pay grades
Development of recommended implementation approach

8. The Study’s Findings
The Library’s salary levels are significantly lower than the average salary rates paid in comparable regional library systems (benchmark organizations)
Internal pay relationship inequities exist within the Library
Salary compression is a factor affecting some Library Employees
Policies regarding maintenance of the plan should be evaluated

9. Tenure Levels are Noticeably Low
The Library’s median tenure is only 4 years, a relatively low number that suggests that you have a significant amount of turnover and your turnover costs are high.
To compare, in 2016 the Bureau of Labor Statistics reported that the median tenure for local government workers nationwide was 8.3 years. Older workers tended to be have higher tenure than younger workers and the public sector tends to have longer tenure than the private sector.
Turnover is costly in service and cash. While there are various reasons for turnover, adjusting pay scales should assist.

10. Salary Survey Benchmark Libraries and Systems
Alamance County Public Libraries*
Onslow County Public Library
Sheppard Memorial Library (Pitt County)*
Randolph County Public Library*
East Albemarle Regional Library (Camden, Currituck, Dare, Pasquotank Counties)*
Neuse Regional Library (Lenoir, Greene, Jones Counties)*
Northwest Regional Library (Alleghany, Stokes, Surry, Yadkin Counties)*
Sandhill Regional Library System (Anson, Hoke, Montgomery, Moore, Richmond Counties)
*Reflects communities who responded to the survey

11. Salary Survey Results and Pay Scale Comparisons
The Library’s Proposed Pay Scale:
Has been developed utilizing the respondents’ survey data
Is an open range system providing minimum, midpoint and maximum salaries consistent with survey responses
Proposed scale contains twenty (20) pay grades with a 7% separation between grades and a minimum to maximum spread of 60% in each grade
Current scale has only eight (8) grades with 16% separation and a minimum to maximum spread of 82% in each grade
Complete survey data can be found in Appendix B. Summary on next slide.

12. Survey Results

13. Proposed ARL Pay Scale

14. Job Evaluation
Systematic Analysis and Factor Evaluation (SAFE®) System
Job Evaluation Factors
Training and Ability
Experience Required
Level of Work
Human Relations Skills
Physical Demands
Working Conditions
Independence of Actions
Impact on End Results
Supervision Exercised

15. Salary Curve

16. Implementation:
The worksheets and Final Report placed every employee in one of three categories and provides three implementation options according to that relationship.*
The categories are:
Employees falling Below the Recommended Pay Grade
Employees falling Within the Recommended Pay Grade
Employees falling Above the Recommended Pay Grade (note: this study showed no positions currently above the recommended grade)
* Once an implementation option is chosen, it can be further divided over time.

17. Implementation Option One:
Option 1 brings all those below grade to the minimum of the new recommended grade and provides nothing for those within or above grade.
This option is the least expensive and leaves you with all personnel on a market based scale
It does not address compression and does not address those whose salaries are found to be already within the new scale.

18. Implementation Option Two
Option 2 brings all those under grade to the minimum of their new recommended grade and provides all those whose current salaries fall within grade a 2% increase (if any are below grade by less than 2%, they get a full 2% raise).
This option is only slightly more expensive than Option 1 due to the preponderance of employees falling below grade and provides a raise for everyone, but does not recognize service length.
Compression is not greatly benefited since many newer workers holding the same title would be paid the same or almost the same as older workers

19. Implementation – Option Three
Option 3 is our recommended option. It brings employees into the new scale using a ‘Years of Service’ adjustment based on time with the library as benchmark for service length.
The service adjustment is factored at 0.5% per year of service in Department, such that a person working for 8 years would be placed on the new scale at 4% above the scale minimum
Best addresses known compression issues so that workers on the same scale are placed according to time in service
This option also will provide the best likelihood of competitiveness among more senior and experienced workers

20. Implementation Costs - Combined

21. Implementation Costs – Regional Staff

22. Implementation Cost - Ashe

23. Implementation Costs - Watauga

24. Implementation Costs - Wilkes

25. Implementation Salary Costs
Current total payroll: $1,286,638
Opt 3 - Proposed total cost: $1,605,482
Overall increase: $ 318,844 (24.78%)
Regional Share: $ ,754 (6.02%)
Ashe Share: $ ,153 (34.11%)
Watauga Share: $ ,104 (29.58%)
Wilkes Share: $ ,834 (19.73%)

26. Recommendations Approve the proposed “Open Range” salary schedule
Approve the recommended salary schematics, establishing internal equity among the various positions of the Library
Approve the recommended Implementation Option to establish more equitable compensation levels for all employees, address compression issues, bring employees below the market up to market minimums and initiate career path for those with loyal service.
Provide support for ongoing administration of the program via a system of market adjustments and/or performance based merit increases awarded on the anniversary date of the employees hire or promotion

27. On-going Administration
Annual Adjustments
Establish guidelines for base adjustments
e.g., CPI, comparable organizations, other economic indicators
Adjust pay ranges and wages of employees
Consider adjustments that recognize individual employee performance
Adopt policy on raising 15 year veterans to mid-point if not there when 15 year anniversary arrives.

28. Fringe Benefits Benefits for Part-time Workers
It is commendable and beneficial to the organization that pro-rated benefits are provided for PT workers
Holiday Leave
Equal to the survey average of 13 days (1 floating)
Paid Vacation/Sick Leave
The Library is above the survey average for paid leave by one day across a worker’s career span. Allowing transition of annual leave to sick days is above the survey average also.
Pension and Retirement
Consistent with survey respondents excepting the provision of a death benefit
Accidental Death and Dismemberment Insurance
Consistent with the survey respondents in providing this benefit, but below the amount contributed. The average paid across the group was 57% and the library pays none of the costs.
Health Insurance
The Library pays approximately the same amount for health premiums for employee plus 1 and family coverage. It pays slightly more for employee only than the survey group.

29. Conclusions Adoption of the report’s recommendations will result in:
Fairer and more equitable compensation to employees in a competitive and changing labor market
Improved opportunities to reduce turnover among current employees and to recruit quality replacements, when needed
Compensation that addresses internal equity and external market competitiveness
Establishing a market position that is fiscally responsible with public resources