A little over a year ago Flagler County government commissioned a salary study that found pay disparities among its 370 employees and proposed certain pay ranges to address the gaps. Some employees were underpaid, some overpaid: no one took a pay cut, of course, but some employees got raises.
But the pay study “wasn’t implemented in its fullest,” Pamela Wu, the county administration’s human resources director, told county commissioners at a workshop earlier this week. She was proposing that Evergreen Solutions, the company that conducted the 2018 study for $38,500, be paid again to conduct another one. This time it would cost $48,000.
Wu cited the county’s turnover rate as an issue, along with morale. “Right now we’ve had several voluntary resignation, we’re at a 13.88 percent turnover rate the last six months.”
In exit interviews, Wu gets one of two answers to her questions about the reasons behind the employee’s departure. “Usually the first is that they’re unable to meet their financial obligations with the rate of pay that they’re making here at the county,” she said. “The second answer I get is, well, I wasn’t really looking but–someone either told me of a position that’s either similar or same, in a neighboring county or city, where they’re paying either two to four dollars higher than what we are. So they’ve opted to apply and have received an offer for that job. So it’s clearly a compensation issue, and that’s why we’re unable to retain our employees.”
But turn-over in a low-unemployment economy is nothing unusual, and it’s been rising year after year, in counter-proportion to the decline in the unemployment rate, which stands at a historic low. According to the Bureau of Labor Statistics, annual turnover in all industries was 44 percent in 2018. In government, which traditionally has the lowest turnover rates, it was 18.7 percent, and in local government specifically, it was 18.5 percent. Excluding public schools, the local-government turnover rate was 20 percent, up from 18.5 percent in 2014. So Flagler County’s rate is far less shocking than it first seems, without the added context.
Commissioner Donald O’Brien asked Wu for the sort of comparative figures that would provide some of that context. Wu did not have the figures just then.
Commissioners were also curious about why the 2018 recommendations were not implemented to their fullest.
“My understanding of that was it was a funding issue,” Wu said.
“And we supposedly do now?” Commissioner Greg Hansen asked.
“That’s something that we would need to discuss,” she said.
Michael Misrahi, a senior consultant with Evergreen, summarized the 2018 study’s findings, which concluded that county employees’ pay as a whole was about 5 percent “behind the market.” A step-based pay approach was proposed at the time, as was adjusting pay grade assignments in 82 classes. “We want to make sure that all employees are making the baseline of their salary range,” he said.
He echoed the same reasons for repeating the study as Wu provided: The 2018 study was to be implemented over a three-year period, through 2021, but the 2018 market rates would come to fruition in 2021, even as the market rate keeps moving. “And so that’s probably the prime concern, would be that your structure would continue to follow out of date if the current course is followed,” Misrahi said.
But even Misrahi said that the turnover rate in Flagler is not inherent to Flagler at all: “You guys are starting to experience some of the real-world issues that come along with compensation challenges, and that’s the spike in turnover and then those hard to fill increases that you may be seeing,” he said. The turnover in trades and blue-collar sectors, he said, “wasn’t surprising to us. That is something we’re seeing across the state and in your guys’ region in particular, across this county, across Volusia County, we’ve seen it going further south, we’ve seen a lot of that. I can tell you jobs like building inspectors are some of the most competitive across the state right now, that all organizations are having issues with, so a lot of the challenges you’re facing are not unique to you, but it sounds like you guys are experiencing them a little bit more severe than some of our other clients recently.”
But that’s not, in fact, documented but only speculated, as O’Brien again underlined: “We don’t know it’s a spike because we don’t know what the historical data is,” O’Brien said.
He wanted more clarity about why the previous study was not fully implemented. Wu said the more senior employees–those making more money already, in effect–were those whose pay was increased. That was not unusual during the years Craig Coffey was the county administrator. (He once claimed, without documentation, that his own employees wanted him to have a 15 percent pay increase when employees were getting at best 1 percent).
The current administrator, Jerry Cameron, told commissioners that having competitive pay was crucial to retaining employees, though he did not offer information commissioners did not already know: “Our biggest competitors are not the government. Our biggest competitors are the private sector,” he said. “At the expense of a lot of other things that we might like to do, we need to get competitive because when we hire someone in, and to get a decent person, we have to pay a salary that is above people who have already been working here five or six years. That tells you immediately that the market is likely to take your existing workforce away from you. That’s why this is so critical.”
But as has been increasingly been the case on Cameron’s watch, the presentation was lacking critical information as well, such as the state of the county’s budget in relation to the “critical” need for salary increases.
Commissioners were still unconvinced, given the recent history.
“The commission all agreed, yes, let’s all do this, and then to our chagrin we find out the plan was not implemented,” Hansen said. “Can you guarantee us if we go through this drill again that the plan will be implemented? I mean, I find that troubling that we all agreed on the plan and then it wasn’t implemented.”
“I would not suggest spending money that I did not intend to implement,” Cameron said. “In fact, this subject would never have made it to you if I didn’t think there wasn’t a real need to address what was a deficiency before.”
Hansen wanted assurances about how the study would be implemented, once completed.
“I can assure you that there will be a thorough airing of the results of this, and if I take exception to any part of it, I will not unilaterally change it, you would be part of that process,” Cameron said.