November 2015 Task Force Minutes

Workforce Retention Taskforce Committee Meeting

November 3, 2015

Cozetta Jones, Chair, called the meeting to order.

Amy Valentine is introduced as a new taskforce member. She is a human resources manager for DFA. She will be replacing Carla Wooley-Haugen for the duration of the taskforce.

Minutes are reviewed. In the fourth paragraph, DHS needs to be changed to ADH. Minutes are amended. Survey questions were not individually listed but copies are available for review. David moves to accept the minutes after corrections are made. Larry seconded. Minutes are accepted as corrected and seconded.

Sample response rate for the survey is reviewed. As of November 3rd, each agency is listed. DHS does not include paper copies distributed to HDC’s and Parks & Tourism. Those will not be picked up until after the survey is complete.

Cozetta asks if the survey should be extended. Members agree not to extend the deadline. Cozetta asks if we should extend the survey to other agencies? Is there a list of smaller agencies we would like to be included in the survey? Kay said no but she could get us a list. Cozetta has had emails and phone calls especially from Emergency Management about including them in the survey. Kay said there was no rigid definition of smaller agencies. She said any agency with less than 50 employees fits the definition.

Cozetta asks if we do include other agencies, how do we reach out to them? Kay suggested something that ASEA post to announce the survey is available to any state employee wanting to participate. David said as long as the deadline is met he did not have a problem including other agencies.

Cozetta will interview agency directors to see how they see things vs. state employee’s views. Directors to be interviewed are John Selig, Richard Weiss, Dr. Nate Smith, and Larry Walker.

Other public employers (mayors, county officials, etc.) need to be interviewed as well to see how they match up with state employees in terms of retaining employees. Kay suggests we need a mixture of rural vs. city. Some suggestions for places to go include Russellville (Logan County), Bentonville or Rogers (Benton County), Desha County, Hot Spring County, Phillips County, Monticello, and Camden. We need to survey more county than city because in some rural areas it may be more difficult to get a good sample size. Kay suggested leaving the selected counties up to Cozetta.

Preliminary results from the survey were reviewed. Majority of the responses are full time. David mentions most responses have 5 or more years from retirement. Kay is surprised that there are more responses from field employees.

David discusses question 21 responses – 60% agree but question 40 have the oppose response. It seems that employees are satisfied but have low morale.

Kay – Questions 24, 25, and 31 – those questions are something they are working on with the pay plan study. 79% of employees said agree about question 24. It’s true because employees cannot stay in their position because there isn’t enough compensation. That is something they will be looking at with the pay plan study.

OPM Classification and Compensation Manager, Mike Bonds speaks about the pay plan study annual meeting held in West Virginia. He says there are 3 big influences in compensation with different states.

Budget position of state. By law, Arkansas does not run budget deficits. This isn’t true of many other states. They have deficit financing in their budget.

Influence of unions. Union states see more pay plan movement and budget increases than non-union states.

Geography. States tend to do things like states in their surrounding region. One thing that can take away from the pay plan is head count. Arkansas has 27,000 employees classified as professional and that seems to be typical for our region. Mid-western states tend to have fewer employees on average than southeastern states.

Minimum pay vs. maximum pay in career service plan in Arkansas is fairly typical – $15,000 to $200,000. Things do change from state to state. For example, the highest paid employee in New Mexico is about $340,000 but the bandwidth for Arkansas is typical.

Pay structure or adjustments is a change in the pay grade themselves. Depending on how it is done it could impact people’s salaries some or very minimally. Arkansas’s pay grading system has an entry number and maximum number. If you add 3% at the end of the fiscal year, it hardly affects anyone but if you add it to the beginning it will affect a lot of the people making the least amount of money. Arkansas did not increase their pay structure and most of the states in our region did not, which seems to be typical. The states we look at include Tennessee, Missouri, and Mississippi because they have similar numbers in their workforce as Arkansas. Texas, Georgia, and Florida have a much higher number of state employees.

COLA increases. Arkansas did receive 1% and we were fortunate because most of the states in our region did not get one. Typical percent does seem to be 1-2% Montana and West Virginia did have lump sum increases. Most states do not have step increases. The ones that do still have it are the union states – Iowa, Kansas, and Hawaii. Some states have step increases for a specific type of employee, like Georgia has one for teachers.

Merit pay. Arkansas 3% for exceeds standards was on the higher end of the scale. Many southern states did not get merit pay. The highest rate Mike saw in the study was 4.5% in Iowa. Other states that gave 3% merit pay included Idaho, North Dakota, and South Dakota.

Longevity pay or career service recognition pay. Arkansas does participate in this and falls into the typical column on how it is paid as a lump sum. Iowa, Montana, and other union states add it to the employee’s salary. Eligibility does seem to start earlier in other states than in Arkansas. Ours begin at 10 years but 5 to 7 years is the median. Oklahoma starts at 2 years and West Virginia begins at 3 years.

Shift differentials (night shift, on call, weekend, and hazardous duty pay). Our differentials are typical especially when it comes to shift. Some of our differentials are competitive. Shift differential at 6% is strong. On call pay has potential for up to 20% which is also very strong. Overall, Arkansas is typical on the rate of differential pay.

Bonus programs. Arkansas does not have a lot of bonus programs in place. Very few programs for retention.

Pay for performance. A lot of talk but not a lot definition to it. Arkansas merit pay has some performance based system. Other states have more unit based, where a metric is set for a department and depending on how well that department or unit performs, the employees have the potential for bonuses based on the department or unit perform as a whole. These systems vary widely and are more typical in big companies. Arkansas doesn’t have a formal pay for performance. Most southern states don’t have systems like this system that are robust but they do have some form of it.

Special adjustment. Arkansas’s list is too long to list for different classifications. Arkansas reported our statewide grids. Tennessee submitted an exhaustive list and since it is a close state, we might look into whether we should establish labor market rates that might not equate to them but look closer into areas where the labor market may be more competitive.

Overtime pay for Arkansas is typical. Relatively uniformity because it is governed in part by federal law. Arkansas has a statute for a preference for compensatory time but it is not required. The General Assembly has made it clear that compensatory time be compensated as comp time. Sick time is not included in overtime.

Keeping pay ranges competitive with the market. The chief issue in Arkansas is funding and we look at other states as well to determine if we are competitive. The number one item is funding though.

Basis of salary adjustment in our state. The primary sources for Arkansas for in position adjustments right now are labor market adjustment and COLA. Other states have step increases. Longevity for very few states – mostly in the northwest. Some fiscal year adjustments based on how much money agencies may have when the fiscal year begins. Anniversary date adjustment which works like longevity pay in other states. Not a lot of movement across the states for a variety of reasons whether its budgetary issues improving or political will. Arkansas compensation’s environment is competitive when looking at states in our area. The question is not if we have a broken system, but rather, how can we make our system better?

He pointed out that in the task force survey, 80% of employees said they would stay in their position if they were paid more. That’s a huge response. It tells us people like their job and would be willing to keep doing it if they were paid more. It also tells us that 80% of people don’t really want to move. Supervisors who don’t want to do the work but need the pay. Other than personal reasons, no one is better off.

Questions for Mike: What states are able to move employees along the pay plan? Union states?

Not all 50 states participated in the compensation survey. States that tend to be the most unionized – Iowa, Oregon, and Wisconsin. Percentages are around 4%, which is fairly typical. Kay added some of these states maybe unionized in particular classifications only. Such as in West Virginia with transportation, Iowa has a heavy public state employees group but only have 3 CPA’s that cover most of their employees, and the next big group is law enforcement.

Larry asks which states had the pay plan that moves people across and which states had a technical pay plan? Mike didn’t recall every one that do but several states do such as Tennessee, Alabama, and possibly Louisiana. Kay assures that is one of the things that is being looked into maybe not at this particular conference but they have done some research. Because you do see various pay tables set up by groups of employees such as information technology being the largest, medical/health related (nurses and doctors), and law enforcement. Sometimes those groups are pulled out from the general pay plan established from the rest of state employees and that is being looked at.

Mike refers back to Larry’s question about states that did have pay structure adjustments. States that listed pay structure adjustments, not necessarily salary adjustments, were Colorado changed by 3%; Hawaii, 3.1%; Iowa, 2.5%; Montana, 3%; Nebraska, 2.25%; North Dakota, 3%; South Dakota had various rate changes, Utah, 3.65%; Virginia, 2%; and Washington, 3%.

David asked Mike if he found any correlation between those states that are highly unionized and the states that run budgets deficits?  He thinks there is some correlation but is hesitant to say there is definitely a correlation. Mike said outside of what information he happens to know, that’s something that hasn’t been researched but he can find out. Most of those states you don’t hear about having severe financial problems but he doesn’t know their exact money position.

Cozetta asks about the step plans. Did Arkansans have one at one time? Why did we move from that to the current pay plan? Kay said Arkansas had a step plan until the mid-80s. In part what occurred was an employee would receive a 5% step after 1 year of employment and move forward in the grade. Then it was reduced to 2.5% due to budgeting concerns. The state had 3 or 4 different tables and it had become difficult to administer. So a decision was made to give percentages as a pay range instead. She wasn’t sure when the percentages began but knows it has been a while ago. Most school districts have a step plan. She thinks even within federal government there are step programs so it is something that should be studied.

Cozetta asked what is the overall feeling when it comes to step plans? Are people, especially the legislature, open to it? Kay said yes, the Executive and Legislative branch have charged OPM with coming up with some sort of pay plan development. Step plans may be overplayed. What is recognized is employees need some sort of increase to stay. Not necessarily in the form of a step but maybe a percentage retention, just something for them to move across their pay grade. The biggest complaint is employees cannot move. We need to find a way to move them along. Commitment to do that but also a commitment to do it within the resources that we have.

Cozetta asked because we have the Revenue Stabilization Act, how can it work together to move employees along the pay pan? Kay – It’s as simple as there may be a year where you won’t lose employees and that does not mesh with the RSA and she thinks that is what we have seen over the years. Particularly in 2009 when the new plan was implemented, we were probably the only state in the union to give increases that ranged from 1.5 – 5% but since that time we have many years there hasn’t been a COLA increase. A 1% COLA increase for Arkansas equates to 6.4 million dollars in revenue. In the leaner years, instead of giving a COLA, merit increases were awarded because they were in the form of a bonus payment and not a continuing application on the part of the state.

Mike answers David’s earlier question. Iowa does have a small budget debt.

Audience testimony. Joe Winford, HR manager for DDS. He states a major issue is retention. We are able to recruit but not retain. The majority of why employees left was due to pay. A couple of people that left said the responsibility of the job still wasn’t enough for the pay they received. If they could pay more, they could attract a higher pool of applicants. Merit bonuses do help boost morale.

Thomas Shephard, works at the DHS processing center in Batesville. A summary of his presentation was handed out to the taskforce members.

– Problem with retention

– Compensation issues

– State employees are paying higher taxes because they are not receiving any raises

– Job competitors in Batesville include Pepsi, banks, Bad Boy motors, hospitals, etc.

– Health insurance increase

– Flex schedules

– Task force meeting need to be held around the state in a public forum

 

Ricky Smith, program eligibility coordinator in Phillips County.

– Constant turnover

– Compensation

– Benefits are more expensive

– Need to hold local meetings

David brought up low graduation rates for Arkansas colleges. Less than 50% of people who start college fail to graduate. If we are expecting to hire college graduates we need to focus on keeping them here and grow here so we have a bigger pool to choose from. Some jobs that are offered are asking for a college degree but don’t really require one. It would allow a larger pool to choose from if we didn’t require that.

Cozetta asks Kay when it comes to requirements for a position, do you have audits for that position? Yes, the majority of job descriptions were written in 2009. OPM can look at option at that point referring to college degrees and revise minimum qualifications if they are not meeting the needs. Agencies will have to make the request to OPM to revise the description. There is a qualifications review process but agencies vary on submitting those. Different agencies take different approaches on substituting requirements for positions. Larry says it’s not about getting college grads to apply, it’s about keeping them. DHS’s highest job competitor is Enterprise Rent-A-Car because they pay more than the state. David says if we can get people to stay for 5 years they are more likely to stay for their career. 5 years is critical to getting people to stay. Sheila says teachers are wanting less stress and less obligation for the pay they receive. Biggest issue from teachers is more about stress than money.

The next meeting will be held December 8th at 5-7 p.m. in Batesville.

Meeting adjourned.

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