*This report was replaced in its entirety by the Department of Human Resource Management on January 19, 2024.

Deloitte Consulting, LLP (“Deloitte") in conjunction with DHRM benchmarked the salaries of 204 roles in Commonwealth occupations against private and public sector comparators. The population of benchmarked roles selected for the study includes a diverse mix of management, professional, support, and technical positions aligned across the full range of Commonwealth salary bands covering classified roles.

As noted above, the study focuses on employee salaries compared to market. The study has not compared the total compensation of classified Commonwealth employees – the value of salaries and benefits – to market.

The 2023 Biennial Compensation Report produced the following findings:

• On average, base salaries in the Commonwealth among the positions benchmarked fall below the market by 13% and 9%, respectively, versus the private and public sectors. Approximately 9% of the benchmarked roles are more than 20% above private sector market median salary.

• Statewide salary adjustments have brought salaries closer to market. However, the salaries of almost 20% of classified employee in benchmarked roles fall below each market 25th percentile.

• On average, when the market data is compared to the Commonwealth salary bands, which generally function as broad bands:

− The minimums of the Commonwealth salary bands fall 36% and 33% below the private sector and public sector market 25th percentiles, respectively.

− The midpoints approximate the private sector data and fall 5% above the public sector data.

− The maximums fall 25% and 31% above the private sector and public sector market 75th percentiles, respectively.

• On average, the salaries of Commonwealth employees generally fall in the second quartile of the Commonwealth salary bands.

In general, 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.

• Proposed minimum wage increases (in January 2025 and January 2026) may further exacerbate compression in pay bands 1 through 4.

• The compensation methodology recommended as part of the 2020 mandated Compensation Workgroup to address these issues has not been adopted. DHRM is re-recommending this methodology be implemented to help alleviate structural collapse and to enable Commonwealth agencies the autonomy to proactively address recruitment, retention, and compression challenges.