Introduction
Prior to implementation of collective bargaining in 1978, the State Personnel Board’s Pay and Benefits Center annually collected extensive labor market salary data for occupations used in State civil service. The information they compiled provided the basis for the State Personnel Board’s annual recommendation to the Legislature on employee compensation.
Since the advent of collective bargaining for State employees and the demise of the Pay and Benefits Center, virtually no labor market compensation data has been collected by the State. Consequently, our knowledge of where the State employer stands in the competitive labor market is anecdotal at best.
In the FY 2005-06 State Budget, DPA received resources in the form of additional staff and operating expenses to conduct an extensive review of where the State of California, as an employer, stands in the labor market.
DPA did not embark on this project simply to review salaries. We needed a more complete picture of the State’s competitiveness in recruiting and retaining employees, which meant looking at other employers’ benefit packages as well as salaries.
To ensure the data we compared was indeed “comparable,” it was necessary to focus on elements of compensation that can be quantified, generally as an employer cost. However, using this approach has a downside: the value of any given benefit to the employee may not be captured in the comparison. That value may in fact have as much influence on employee decisions about their employment as the quantifiable factors. Likewise, some employees may choose a public service job over one in the private sector, and vice versa, for reasons that go beyond the “total compensation” packages we’ve measured.
As we planned the State’s first comprehensive survey of compensation in over 20 years, DPA set out to address two primary objectives:
- Determine generally where specific benchmark job classifications stand relative to other public and private employers to guide allocation of the State’s employee compensation dollars; and
- Begin building the data “infrastructure” that will allow the State to take a more business-oriented approach to managing the State’s human resources.
Limitations of this Survey
It was not feasible to gather data on all the State’s civil service classifications – there are more than 4,100 of them. Consequently, DPA relied on “benchmark” classifications to form the basis of this survey. Comparing compensation for these classes provides a general picture of where we stand with respect to general occupational groups.
This survey does not cover public safety employees. Our consultant for the public sector portion of this survey advised us to survey these occupations separately because they tend to have different pay structures and retirement programs, so data collection instruments must be tailored to these particular occupations. The State is in the process of contracting for a separate study of public safety employee compensation.
We were not able to weight the data we gathered due to the difficulty of getting information from survey participants on the number of incumbents in each benchmark class. With more time, it would be possible to gather such information; in the future we will build that time into the survey.
Obtaining private sector information that would allow us to compare total compensation for the benchmark classifications is more difficult than obtaining such information from public employers. Salaries paid by employers in the private sector are usually highly confidential and typically obtained only through legal mandate or disclosed to professional survey organizations under conditions of strict confidentiality. Gathering this information would require an expensive customized survey of individual employers and more time than we had for this first survey.
Since it was not possible given the time and cost constraints of this survey to obtain reliable “total compensation” from private employers on a benchmark-by-benchmark basis, funds were provided for DPA to purchase a variety of subscription services used by human resources professionals to evaluate private sector compensation practices. From that data, which did not include the level of detail available from the public employers, we were able to draw generalized conclusions about elements of private sector compensation packages to complement the public sector data we gathered.