County increasing employee salaries by nearly $11 million in 2021
For the first time in 33 years, Oakland County has approved and will soon implement a new salary administration plan that will boost employee salaries, overall, by 3.16%.
Since 2017, the county has been working on crafting a new salary administration plan to ensure employee salaries align with their private-sector peers and that the county remains a competitive employer in the region. The increased salaries will also help the county in attracting and retaining qualified and talented employees.
The compensation plan covers 3,500 non-union, full- and part-time employees across all departments and 825 job classifications. The total cost to implement the salary plan, and anticipated union employee salary increases, is around $10.5 million. Over the next five years, that number could increase to $12 million, dependent on general salary increases approved by the county board of commissioners.
April Lynch, deputy county executive who oversees the department of human resources, said development of a new salary administration plan would be a “heavy lift” under normal circumstances, but the death of the late L. Brooks Patterson and COVID-19 caused significant delays in the development process.
“The salary study commenced in November 2017, and analysis of that data began the following January,” she said. “The recommendations for the new salary administration plan overlapped with the passing of the previous county executive. As the new administration began tackling the project, our focus turned toward the COVID-19 pandemic.”
In addition to those challenges, the new administration of County Executive David Coulter wanted to also review the wages of union employees to ensure the county could also competitively recruit and retain workers for those positions. The county has 1,700 union employees scattered across all departments including the sheriff’s office, facilities management, animal control, water resources commissioner.
“Lastly, we needed to
take the time to understand the proposed salary administration plan’s impact on the budget and determine how to fund these increases in a way that maintains the county’s fiscal responsibility,” said Lynch.
David Woodward (DRoyal Oak), chair of the county board of commissioners, said the plan is “way overdue.” The board gave the plan unanimous approval earlier this month.
“I want to applaud the Coulter administration for rolling up their sleeves, getting it done, and doing the heavy lift to make sure it happened,” he said. “I’m a big believer that we need to be raising wages for our county workers, and frankly all workers, so that they can support their families and to make sure we can retain and recruit the talent we need to provide critical county services.”
The county intends to fund this $10.5 million increase in salaries through a variety of ways including a new voluntary early separation incentive program. The program will allow eligible retirees, both full-time union and non-union employees, to retire earlier than expected while being offered a lump sum payment that will be based on their salary and years of service.
Over the next five years, 900 county employees will be eligible for retirement, including 500 right now. Although the program is open to all full-time employees who have worked for the county for at least one year, those eligible to retire would likely be interested the most in this program.
The program application period will be open January through March. Enrollees will be required to sign a separation agreement with a separation date up to two years from the signed agreement. The lump sum payment will be one week of salary for every year they have worked for the county up to 26 weeks. For example, if someone makes $1,000 per week in base salary and has worked for the county for 26 years, the lump sum payment would total $26,000.
Lynch said the program presents an opportunity for county departments to reduce their staffing levels through natural attrition. The county is anticipating a 25% program acceptance rate, a rate Lynch says is “typically standard” in separation incentives. With that acceptance rate, the county will see a net cost savings of around $3.6 million per year, and cumulative savings of $14 million through 2025.
“The natural attrition of the workforce enables more cost savings, not only for the updated compensation study, but for new programs, future capital needs, etc,” she said. “It also helps cultivate a more diverse and inclusive workforce while valuing those who have given so many years of service to the county.”
A reduction in its workforce through voluntary means will help the county fulfill its long-range plan of maintaining a balanced budget without the use of fund balance.
Besides the separation program, other measures the county may use to pay for the salary increases will include other personnel cost savings such as reviewing how to optimize health care costs, reducing the number of part-time positions, and identifying other budgetary savings at the line-item level.
Lynch told The Oakland Press that she doesn’t have concerns about not being able to fill the positions left vacant by the eligible retirees who take advantage of the new program, adding the administration is working closely with departments to evaluate their workforce plans over the next five years.
“We will be reviewing their succession plans, how many of their employees retired, and their recruitment plans to address the next round of hiring,” she said. “Oakland County is an employer of choice in the region, and we hope to strengthen that reputation. I believe the new compensation plan coupled with our mission to serve our residents will attract great candidates to our open positions while at the same time retaining the talented staff already on our team.”
Salary adjustments for union employees will be made during the contract negotiation process with many of the those contracts having wage reopener’s right now. The board of commissioners did approve a 1% salary increase for union employees in 2021.
Oakland County elected officials will not be seeing any pay increases for 2021, which includes the countywide positions and the commissioners.