Oklahoma must begin improving state employee salaries this year if it wants to compete with other employers for high quality employees, according to the author of the recent remuneration study. Neville Kenning, president of Kenning Consulting, spoke November 19th during an interim study on state employee compensation.
“Our salaries are way too low. We’ve got to start with increasing pay,” Kenning said. “We need to do something for salaries in the next legislative session as we walk down the path of changing the (benefit) mix.” He said Oklahoma must have the right mix of salary and benefits to recruit and retain good employees.
Even though the study’s details have yet to be released, preliminary findings show that state employee benefits are comparable to market but overall state employee compensation is too low to compete with other employers for quality staff. The benefits’ value does not make up for low employee salaries, so the State lags behind the market on total compensation for almost all state jobs.
“If you continue to offer low salaries, you won’t be able to discuss benefits,” Kenning said. “Salaries matter. I want to dispel the myth that benefits are so good that we don’t need to address salaries. We need to get the right mix between salaries and benefits.”
The hearing was held at the request of Rep. Leslie Osborn while the compensation study was conducted at the request of Gov. Mary Fallin.
Kenning said the study’s preliminary results show that base salaries still lag about 80 percent behind the private sector as was shown in earlier studies and that the mix of salaries and benefits is weighted more toward benefits. The report is scheduled to be released officially in early December.
The study looked at 141 state benchmark positions across different state agencies representing 10,082 employees. It compared Oklahoma state employee compensation with information from a number of sources including other Oklahoma employers, and state employee compensation in the states of Arkansas, Colorado, Kansas, Missouri, Louisiana and New Mexico.
Both actual salaries and salary ranges were examined in the study as well as life insurance, sick leave and short-term disability, health insurance, retirement, annual leave and paid holidays. Pay Practices like pay movement and pay delivery, longevity and the differences in pay for classified and unclassified employees were also examined.
Kenning said approximately 80 percent of benefit costs to the state came from health insurance and retirement. He also said that the amount of an employee’s salary directly affects their benefits like retirement and explained that if the state is not competitive in salaries it won’t be competitive in retirement plans.
He explained that Oklahoma did not get in this situation overnight and his report will include a five-year plan of action. He said any changes to Oklahoma’s salary and benefits should not only consider the requirements of the current workforce but the future workforce as well. He believes that in addition to changing the salary and benefits mix, Oklahoma should work toward a pay system that reinforces employee performance and not grant across the board pay increases.
OPEA President Jess Callahan and Board Member Mike Rogers spoke to the committee and described the challenges that low pay has meant for their workplace and families. They also asked the legislators to take action this session to improve state employee pay this year.
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