Damakant Jayshi
The human resources firm that Marathon County hired to do a staff compensation study is recommending the county adopt an average market compensation rate for employees to address a “significant” gap with the existing pay scale.
During a presentation of preliminary findings in August, the firm’s representatives said the county’s compensation was “significantly behind market” rates. The last rate adjustments were made 10 years ago.
Pay adjustments to align with the market average are set to be implemented on Dec. 11 if the 38-member Marathon County Board of Supervisors endorses the plan. The implementation would cost the county approximately $1.58 million with an overall cost of about $2.69 million.
The county’s Director of Employee Resources, Molly Adzic, told Wausau Pilot & Review that “the $2.69M represents the approximate estimated cost of implementation; however, many departments and positions receive state or grant funding so the County will only be responsible for a portion of the overall implementation costs and that number is the approximate $1.58M.”
Director of Finance Kristi Palmer said the county has enough capacity in the 2023 budget to make the recommended changes. Vacancies exist in almost all departments, she said, adding that budget transfers between departments might be necessary. As of September, the county reported 77 staff vacancies.
The firm, McGrath Human Resources Group, suggested using performance-based metrics for employees’ progression through pay ranges. Other recommendations shared with the Marathon County Human Resources, Finance and Property Committee on Tuesday include having 23 pay grades and adopting a classification system more reflective of working titles in practice today.
On Aug. 10 the firm’s representatives, who said they needed at least until October to prepare a final report, delivered their findings after Committee Chair John Robinson pressed them to provide at least preliminary data so that the Board of Supervisors could discuss it before the budget was finalized. Budget-related discussions have begun, with the adoption of the annual budget set for Nov. 10.
Malayna Halvorson Maes, senior consultant at McGrath, said the firm dropped its original recommendation of paying above average market rate because of uncertain economic times, limited amounts that could be used for adjustment and for the plan’s long-term financial sustainability.
“You will see that we established your salary ranges on the average market and that would be the mid number,” Halvorson Maes said while presenting the recommendations to the HRFP Committee. “The minimum has been set 12% under that (mid-point).” The firm did so, explained the consultant, because it would enable employees to reach the market point in less time than the current system allows. If that takes longer, Halvorson Maes warned, “(employees) are going to leave.”
At a meeting of the Board of Supervisors held later in the evening, she said the approving the compensation plan would be the most important piece of legislation the board will be making. Without human capital, she added, supervisors will not be able to provide services to their constituents.
The compensation report says employee turnover has a direct impact on budgets. One such cost is when an employee leaves, resulting in a replacement. “Turnover can be calculated as Total Payout Cost + Recruitment Cost + Replacement Compensation/Benefit Cost + Training Cost. Turnover Costs will typically calculate around 1.5 times the cost of the original position,” the report says.
The turnover at Marathon County is around 16%.
The McGrath report said that county “must commit” to market adjustments to the recommended structure at regular intervals to ensure salary ranges maintain competitiveness and recommended conducting a periodic review of the external market every 3-5 years.
Members of the HRFP Committee asked questions about the plan’s implementation rollout and its sustainability. Member of the committee, Alyson Leahy, asked whether the new structure should be made public while announcing vacancies and how to do it.
Director Adzic said county officials will try and market the new plan. Later she told Wausau Pilot & Review that placing employees on the new schedule and providing increases based on their performance will begin in November and implemented in December. It will serve as the county’s annual pay for performance adjustment for 2023, the director added. This time it is taking place earlier than the usual March-April timeline. “We still plan to do pay for performance increases again in 2024,” Adzic said.
Marathon County continues facing challenge in hiring, retention of employees
While presenting staffing updates to the committee, Director of Employee Resources Adzic said attracting and retaining a qualified workforce continues to be one of the largest challenges that Marathon County faces.
The turnover rate at the county is trending at 16%, she said. The average turnover in state and local government, per McGrath report, is around 20%.
Some of the hardest hit departments are Conservation, Planning and Zoning with 54% attrition rate, the Sheriff’s Office at 17%, and the Highway Dept. at 25%. Explaining the attrition chart, Adzic said 34.5 is the annualized number of individuals leaving employment “we anticipate for the Sheriff’s department based on data through the end of August. That 34.5 is 17% of their overall allocated staff within the department.” Marathon County’s average retention is nine years.
The average retention of employees in current position is 5.7 years.
According to Adzic, while the county saw a 40% increase in recruitment so far in 2022 over 2021, it also faced a 44% reduction in the average number of applicants per requisition. The number of resignations exceed those of retiring employees. Salary and workplace flexibility are two top factors behind an employee’s decision to leave the county, Adzic’s staffing update report said.
[For McGrath’s presentation and the full report, click here, and go to page 418. For the Marathon County staffing update, go to page 410 of the document.]
