RD12 - Review of State Employee Total Compensation

Executive Summary:
The Joint Legislative Audit and Review Commission (JLARC) approved a resolution in November 2006 for its staff to study compensation for employees of the Commonwealth. To assist with the review, JLARC staff procured analytical and consulting support from PricewaterhouseCoopers (PwC) and Mercer.

The study found that most agencies that employ classified staff agreed that total compensation allows them to attract sufficiently qualified staff. Employees reported that the State’s health insurance, retirement, and leave benefits are among the most effective recruitment and retention tools.

Mercer found that the State’s total compensation was 96 percent of the market median. Cash compensation was 88 percent, while benefits were 108 percent of the market median.

JLARC staff have identified two total compensation options for further consideration by the General Assembly. In the fifth year of implementation, the first option would result in approximately $82 million in cost avoidance. The second option would result in approximately $1 million in cost avoidance in the fifth year, but is designed to achieve greater savings in the long-term.