Salary analysis poses decisions with cost to Jefferson City

The City Council in the future should provide some hard-hitting decisions on addressing pay for Jefferson City employees, the city administrator suggested Tuesday.

A voluminous study administered by consultants from Evergreen Solutions recommends various options to enact for improving employee pay. The council heard from the lead consultant on the project Tuesday during its regular meeting.

Mark Holcombe, the Evergreen project manager, spent roughly 30 minutes providing an overview of the comprehensive study. He said the city possesses a simple pay structure that shows employees are advancing through various pay ranges over time.

Holcombe observed wage compression and that 85 percent of employees’ salaries fall below the midpoint, meaning this indicates a higher amount of turnover and new hires.

Holcombe guided the council through the report, which was divided into three sections: an internal analysis using employee data, a regional market analysis and a list of eight recommendations for future improvement.

The council offered little conversation about Evergreen’s analysis after the presentation. City Administrator Steve Crowell, however, said the council should be prepared to address the concerns, which will pose additional costs to the city budget.

Councilman Scott Spencer voiced some concern over not receiving any of the consultants’ drafts that were exchanged and amended beforehand by consultants and city staff. He called this “disingenuous.”

Crowell noted the final report was distributed to council as soon as he received it last week.

The study offers ways to adopt a new pay plan that seeks to address wage compression and offer employee salaries that compete with its regional competitors.

Evergreen presented two pay plans. If adopted, one plan puts the city into the 50th percentile rank among peers, while the other allows the city to fall into the 70th percentile rank among peers. If changes were made to reflect a 70th percentile rank, it means the city’s pay plan would overall pay greater than 70 percent of the referenced markets in the study.

Holcombe noted some advantages and disadvantages to both. Implementing the 50th percentile rank pay plan allows the city to stay competitive with the regional market. The total cost to implement this plan annually for all employees is about $1 million, Holcombe said.

“You wouldn’t escape all the concern necessarily with compression, but it also shows that you’re certainly not doing worse than your peers as far as moving employees through,” he said.

Implementing the plan at the 70th percentile rank could cost around $1.8 million each year.

“(This) would be designed to put you above some of what your peers are experiencing and hopefully rise above the concerns you see everybody else having in the market today,” Holcombe said.

Consultants noted the information provided in the study pertains to data from last fall and does not account for changes in the labor market occurring now.

The study, released to the public last Thursday, was highly anticipated by council members and city staff. The council during the summer enacted a wage increase after a month-long debate. But many officials have stressed employee compensation is a top priority.

Data provided by the city showed an employee turnover rate of nearly 15 percent in 2022.

Council members offer little conversation as to which approach they wanted to pursue. While Spencer said he was concerned about why drafts weren’t disclosed, Councilwoman Laura Ward said she was grateful she didn’t have to review a “floating draft that council couldn’t do anything with.”

Near the end of the conversation, Crowell added a thought: “So just as followup: at some point, maybe not tonight, but at some point, we need to encapsulate the answer to the percentile 50 or above and council needs to answer the implementation method, all of which have costs.”

Holcombe thanked the council for their time and said the Evergreen consultants would be happy to advise in any implementation process going forward.