Study Shows State Workers Earn Less But Have Better Benefits Than Private-Sector Counterparts

Although state employees’ total compensation package “is highly competitive with the market,” according to this year’s Total Compensation Study conducted by Arthur J. Gallagher & Co., the “base salary is 12.3 percent below market and potentially misaligned with private sector Utah market.” The state offers a higher benefit value to add to the below market base salary to gain competitiveness.

In addition, the minimum state salary is 16 percent below the market average, potentially causing recruitment problems for state agencies, according to the study presented on May 23, 2018 to the Legislature’s Retirement and Independent Entities Committee.

The Utah Public Employees’ Association (UPEA) each year attends the presentation lawmakers receive about the study, which leads to discussion about how better to align state workers’ compensation with that of their private sector counterparts. Lawmakers are interested in how any changes to the way state workers are compensated affect Utah’s budget. .

After presenting their findings Jim Fox and Mark Goldberg of Gallagher & Co. discussed recommendations to improve the state’s current position compared with private industry for total compensation, which includes base salary, benefits, and leave. They acknowledged that the state provides a competitive total compensation, but said it is missing incentive opportunities often found in the private sector.

Fox and Goldberg suggested reviewing jobs for which compensation is greatly misaligned with the private market to strategize ways to improve recruitment and retention.

State Auditor John Dougall urged the committee to consider generational differences. When recruiting younger people for state jobs, the state needs to be more competitive with private market salaries, whereas older workers often care more about greater benefits.

Many committee members were concerned about Utah’s low base salary compared with the private market. Dougal suggested offering more flexibility, enabling workers to choose higher salaries and lower 401(k) contributions if they find such a compensation package more attractive. Fox and Goldberg added that base salary should increase to reflect cost-of-living adjustments, promotions, and/or general state employee salary increases.

Gallagher & Co. did not consider personal leave in it total compensation calculations, but discussed it separately. The state offers more annual sick-leave days with no cap on accrual than the private market, and was found to be highly competitive in offering holiday leave days.

The findings in the Gallager study were consistent with the Korn Ferry Compensation Study presented last year, which showed state employees’ salaries were 10.9 percent below market and benefits were 25 percent above market. UPEA continues to focus its efforts on enhancing compensation and benefits for employees. UPEA will continue to provide updates as they come.

Leave a Reply

Your email address will not be published. Required fields are marked *