RD817 - Biennial Compensation Report – Occupational Recruitment, Retention, & Market Position Analysis of the Commonwealth’s Classified Workforce – Data as of July 2021, Report as of September 2021

Executive Summary:

*This report was replaced in its entirety by the Department of Human Resource Management on December 29, 2021.

The 2021 Bi-Annual Compensation Report produced the following findings:

• DHRM in conjunction with Deloitte Consulting benchmarked 213 Commonwealth occupations against private and public sector comparators

• Among those occupations:

o The average statewide turnover rate was 12%, with the most distressed roles ranging from 17.2% - 40.8% turnover.

o Base salaries in the Commonwealth lag the market average by -15.7% and -11.9% respectively versus the private and public sector.

o However, base salary averages range from 63% above market to -58% below market depending on the distinct occupation.

• Inconsistent appropriated salary adjustments have made it difficult for state agencies to build a proactive and sustainable approach to addressing compensation concerns.

• The current classified salary structure has become reactive and critically distressed over time.

• The statewide adjustment method of awarding flat rate increases has continued to put stress on the classified salary structure and has accelerated compression issues in the lower pay bands.

• Near term minimum wage increases (January 2022 & January 2023) will further exacerbate compression in Pay Bands 1 through 4.

• The combination of stress on the classified salary structure and near term minimum wage increases supports a recommendation to realign the salary structure over the next two years.

• The compensation methodology recommended as part of the 2020 mandated Compensation Workgroup to address these issues was not adopted, and therefore is rerecommended to provide relief from structural collapse and to enable state agencies the autonomy to proactively address recruitment, retention, and compression challenges.