RD612 - Annual Report on the Discrepancies in Compensation between the Public and Private Sectors – 2017

Executive Summary:

To report discrepancies between the compensation of classified employees in state government with those in private industry for 2017, the Department of Human Resource Management (DHRM) is reporting two key indicators of base salary competiveness. These are both common, frequently used measures organizations use to determine the competiveness of their base salaries.

• The first competitive indicator reported is the average percentage of salary increases and pay structure adjustment that private industry implemented during 2017 in comparison to Virginia state government. (Note: adjustments to pay structures are generally less than performance increase budgets because of employee movements, progression, and transitions.)

• The second competitive indicator is a comparison matrix of the average base salary of a sample of employees in twenty-five Virginia state government roles with salaries in private industry for roles at an equivalent level.

Data for this year’s report was gathered from publicly available 2017 reports and 2018 projections for base salary increases from national compensation benchmarking organizations. DHRM also indexed the average salaries of a sample of Virginia classified state employee roles with salaries paid by other employers for comparable roles at the national level using salary surveys compiled by Willis Watson Towers. The General Assembly’s Commission on Employee Retirement Security and Pension Reform recommended that DHRM subscribe to and utilize commercial salary survey information for salary comparisons, and funding was allocated by the General Assembly allowing DHRM to subscribe for the first time since 2011.

In November of 2017, the Joint Legislative Audit and Review Commission (JLARC) completed a comprehensive study of the Commonwealth’s total compensation program, including salaries and benefits. This recent study was referenced to validate the findings in this report.