Aspen officials studying how to be a market leader employer
Cost of living, housing shortage are challenges in recruiting and retaining employees for municipal government
The city of Aspen has developed a new total compensation philosophy in its goal to be a market leader in employee pay and workplace culture by recruiting and retaining individuals who can provide excellent service to the community.
With the high cost of living here coupled with a housing shortage, the city is challenged in offering competitive pay, said Alissa Farrell, the municipal government’s administrative services director.
“It is extremely difficult to recruit and retain employees, just as other employers in the valley face, because of the housing challenges and total compensation packages,” she said last week.
The city has been able to place only 15% of new hires into municipal government-owned employee housing, according to a recent study.
A compensation and classification study done earlier this year by city-hired consultant, the Segal Company, showed that 61% of staff turnover in the past three years was employees leaving for work in the private sector.
And the average cost to replace an employee can range as high as 200% of a position’s annual salary, which includes staff time, onboarding, training, advertising and general recruitment costs, according to the study.
Due to the pandemic, vacancies have remained longer than anticipated with the average being 127 days.
New hire data show that 34% of employees are coming to the city from the public sector and 64% from the private sector.
The total compensation philosophy is designed to be a guide for developing a pay structure for the organization for years to come.
The desired outcome of the project is to develop a more effective and up to date system for managing employee pay and wage decisions, according to Jessica Roberts, the city’s compensation and benefits manager, and Courtney DeVito, the city’s human resource director, who will be presenting the philosophy and the thinking behind it to Aspen City Council during Monday’s work session.
The city recognizes that total compensation is more than just a paycheck, so the philosophy also considers health and well-being benefits, professional development, growth opportunities, transparency and culture.
Segal, which is contracted with the city for $90,000, worked with a steering committee comprised of department heads to understand the municipal government’s business and operational challenges.
The consultant also conducted interviews with some of the more than 320 full-time city employees to better understand the workplace culture, values and goals.
Another consideration for the steering committee was to evaluate the city’s mix of pay and benefits, developing strategies for ensuring salaries and hourly rates, as well as benefits that support the organization’s culture, values and goals.
Those strategies focus on both monetary and non-monetary rewards highlighting the total of what’s available to employees, and the city’s commitment to offering competitive, fiscally responsible and sustainable pay and benefits.
In determining the total compensation philosophy, Segal took into account the outside labor market because the city competes for talent locally, regionally and nationally in both the public and private sectors.
The next phase of Segal’s work is to determine financial implications to the municipal government in advance of planning for the 2022 budget, according to Farrell.
But first Segal must examine all of the city’s job descriptions and pay scales, and then develop a compensation analysis and pay classification structure.
Segal will provide market data for each position and recommend a salary schedule and pay grade assignment.
A market study report is expected to be delivered to council in November, which is when budget discussions for 2022 are in full swing.
Farrell said it is too soon to tell how restructured compensation packages will affect the city’s budget.
Staff will present recommendations on the position classifications and an external labor market assessment before finalization of the study, which is anticipated in December.
“I think it’s been a healthy and transparent process to recruit and retain a talented workforce for the community,” Farrell said. “It’s exciting to see that we have a total compensation philosophy that is flexible and nimble.”
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