Total Compensation

Board Work Session

Compensation

April 2, 2013

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FY 13

Benefits

Competitive Salaries

Working Smarter

Development

Work/ Life Balance

Employee Recognition

Benefits offered to eligible

temporary employees

Comp

Maintenance

Program (Yr2)

Defined Contribution Option for

Senior Management

Leadership

Development Cohorts

lead to promotions

Telework

expanding

New Hire process

going “green”

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Living Wage

Increased

Mobile Worker

Initiative

Leverage

GoToMeeting

Merit Awards

County

Manager’s

Excellence

Awards

CPR Certification

Classes via Fire Dept.

Safety Seminars

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Total Compensation Philosophy As an Employer of Choice, Arlington County recognizes our employees are the

foundation of our success. This philosophy provides a broad framework to assist

the County in making decisions that impact Arlington County Government total

compensation. We strive to offer a meaningful, well-rounded total compensation

package that:

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• Enables Arlington County to recruit, retain, reward, and motivate a

high caliber, diverse workforce.

• Provides employees with fair, competitive pay, benefits and

retirement options.

• Shares the cost of benefits between the County and the employee.

Adopted by County Board July 21, 2012 A-4

Principles

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• Provide salaries that are competitive in our target market. Our target market

consists of those jurisdictions and organizations of similar size and structure that

would be our competitors for employees and includes at a minimum Alexandria,

Fairfax and Prince William

• Provide employees with leave and/or disability benefits that assist in replacing a

portion of income lost in order to care for themselves during qualifying periods of

illness or absence.

• Provide a retirement program that offers defined benefit and defined contribution

(including deferred compensation) options that will assist employees in achieving

their individual retirement goals and targets replacement of 65% of income after a

30-year career

• Provide affordable healthcare that offers employees the ability to choose the option

that best fits their needs.

• Encourage, support, and reward employees at all levels of the organization by

offering learning opportunities to promote professional growth and development

• Enhance work-life balance through offerings such as: alternative work schedules,

employee wellness programs and ancillary benefit programs like walk/bike to work,

reduced County recreation fees and transit subsidies

• Foster a positive work environment that is meaningful, stimulating and encourages

employee innovation and creativity

Adopted by County Board July 21, 2012 A-4

Employee Engagement Survey Results • 72% - 79% satisfaction range regarding benefits, work

environment, work/life balance, learning opportunities, and

diversity

• Survey Top Themes:

• Employees engaged by interesting & challenging work

• Employees value the difference they make within the

community, interacting with clients or have a strong

commitment to public service

• Employees feel supported by co-workers or by

providing support to other staff

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FY13 Progress Report Total Comp Element

FY2011 FY2012 FY2013 Year-to- Date

Total benchmark classes lagging at midpoint

78% 65% 50%

Employees hired over midpoint

56% all 100% MAPs

32% all 100% MAPs

31% all 85% MAPs

Turnover 8.5% 6.7% non-retirement

10.2% 6.7% non-retirement

6.6% 4.1% non-retirement

Employees at maximum (End of Fiscal Year)

22% 18% 7% (Projected)

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Compensation Maintenance Progress: After 2 Years

Results

Structure Changes • 76% classes changed grade (started with those most behind)

Employee Impact • Employees at maximum reduced by 76% • 80% of employees received increase • 400 employees moved into broad band pay

for performance programs • 500 moved into open ranges (Public Safety)

Cost • Total Annual Cost to Date: $5M

• Focus: Improve Structure Competitiveness and Provide Pay Future • Completed*: 18 Studies covering 1950 positions • To Be Completed: 40 Studies covering 1350 positions

*From start of program through March 31, 2013 A-4

Keeping Pay Competitive

• Arlington’s actual salaries have kept pace due to

continued step increases

• Fairfax & PW considering alternating steps and

COLA

• Alexandria implementing pay improvements

• Alternatives for staying competitive:

– Additional step

– Open Ranges

– Across the board increase (mpa/cola)

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Alexandria* Arlington Fairfax* Prince

William*

Major health

plan 3% 3% 8% 3%

Dental

insurance 0% 0% 5% 10%

FY14 Proposed Health Care Increases

*Budget estimate.

Alexandria

• Major plan design changes were needed to reduce projected increase

from 10% to 3%

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3% Premium Increase Means:

Additional Employee Cost Per Pay Period

Single Employee +

One/Spouse

Employee +

Child(ren) Family

Cigna HMO $1.33 $3.50 $2.92 $4.92

Kaiser $3.24 $8.52 $7.14 $11.95

THE BOTTOM LINE: A General Employee’s Pay Slip

Average Annual Salary $68,000.00

Average Step Increase: 2.75% $1,870.00

Cigna HMO Increase (Family) $128.00

Gross Salary Increase after Health $1,742.00

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Health Care Reform

Key Provisions Effective in 2014 • Individual Coverage Mandate • Employer Shared Responsibility – “pay or play” • Health Insurance Exchanges become available • Medicaid Expansion

Implementation in Virginia • Federal Govt will operate exchange for State • Medicaid expansion awaiting Governor’s signature

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Retirement Changes in Other Jurisdictions

Alexandria

• Increased Police/Fire pension contributions from 8% to 10%

• Continued phase in of employee VRS contribution (year 2)

Fairfax

New hires after 1/1/2013

• Increased retirement age to 55 for General employees

• Changed from rule of 80 to rule of 85 (age + service) for General Employees

• Capped use of sick leave for service at 2080 hours (1 yr) for all three retirement plans

Prince William

• Continued phase in of employee VRS contribution (year 2)

Arlington Defined Benefit program has become more competitive due to these changes

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Comparison of Proposed Budget Actions

Arlington Fairfax Alexandria Prince William

Holidays Current

12 11.5 11 12

Steps/Merit Increases

2.75% 0% for general Public Safety to get longevity

3.35% 0%

COLA/MPA 0 0 1% for general employees to offset increase in VRS

2% plus 1% increase to

offset VRS increase

Proposed -Eliminate Columbus Day -Continue Comp Maint. Program -Steps

-Alternating merit increases and COLA

-2.3% lump sum for employees at top of grade

-Alternating merit increases and COLA

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Moving Forward

Consider Open Ranges

Complete Compensation Maintenance Program

Implement new Health

Care Contracts

Evaluate /Implement recommendations from

Total Compensation Workgroup

FY 14 & Beyond

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Continue Compensation Maintenance Program

Bid Health Plan

FY 13

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