Investing in Excellence
University moves forward with compensation and benefits initiative
Following the Board of Trustees’ approval, Seattle University is stepping up its investment in the excellence of its faculty and staff, a key institutional priority, by forging ahead to implement the findings of the Compensation and Benefits Study.
“We are blessed to have a Board of Trustees that believes this is an important step to take,” said Jerry Huffman, vice president for Human Resources and University Services, at a recent open forum.
In the immediate future, the university’s stepped-up commitment is focused on pay, with $500,000 being allocated to faculty and staff whose salaries are most out of line with the market. These pay adjustments will be effective July 1. This month, decisions are being made about how to allocate the adjustments to specific people. Staff notifications are targeted for July 1.
The $500,000 pool for adjustments in FY 2012 is the first step in a five-year plan to close the $5 million gap that Mercer Consulting identified in its study of SU’s compensation. Mercer found that faculty salaries, on aggregate, are at 96 percent of the market median, and staff salaries are at 90 percent. Staff salaries will be increased by $3.45 million and faculty salaries by $1.43 million over a period of 3-5 years.
“When we have completed this project, everyone won’t be exactly at the market median, but the average pay rate will be,” said Huffman. Individual salary levels will be based on performance, prior experience and other factors, he added.
|Jerry Huffman, vice president for Human Resources and University Services, walks faculty and staff through Mercer Consulting's findings on compensation and benefits at a recent open forum.
The market adjustments are being made in addition to the regular increases for faculty and staff. Effective July 1, staff will receive an across-the-board increase of 2 percent. The following year, starting July 1, 2012, staff will move to a merit-based system where pay increases vary based on personal performance. (Faculty already are paid under a merit-based system.)
To facilitate the transition to a merit-based system, staff will not participate in performance evaluations this year. That will give supervisors time to be trained in the new system, with the first evaluations in the merit-based era scheduled to be completed March 31, 2012. Other important aspects of the new staff performance and pay program will be ironed out over the summer months and will be communicated in the fall.
Talking about the sequencing of the university’s effort on compensation and benefits, Huffman said, “We need to get pay right first,” pointing out that while need for benefits can be unique to each person’s situation, compensation affects everyone in a more universal way.
And yet benefits are very much a part of the overall equation, with changes being considered particularly to health care and retirement plans. “We set out to look at compensation and benefits as a whole,” Huffman said at the forum, “and that’s what we’re doing to ensure that we are as competitive as we can be in those programs.”
While Huffman said the university’s overall healthcare benefit is “more or less on market,” SU is not as typical in terms of its how premium costs are shared, particularly for families.
As for the 403(b) retirement plan, the university is above the market median, but Huffman explained that the university’s contribution to employee retirement plans, which is 10 percent of salary and currently doesn’t require an employee match, comes with a downside: only 45 percent of employees elect to make their own retirement plan contributions, and compared to other institutions, Huffman said, “That is really low.” To encourage higher employee participation, the university is considering a matching program, although no decision has been made on whether that would happen or what it would look like.
So why broach the possibility of making adjustments to healthcare and retirement plans now, rather than waiting until more detailed information is available? The approach is driven by a commitment to transparency, said Huffman. “There will be adjustments,” he said, “and we don’t want anybody to be surprised by that.”
What if an employee had their salary adjusted upward but then also must pay a higher premium for health insurance? Huffman assured those attending the open forum that the university will time any changes that may be made in a way that “gives us all a line of sight…so we can be planful.”
Some have questioned where the money is coming from to pay for the $5 million increased investment in faculty and staff salaries over the next five years. “We recognize that we’re going to have to find money to do this,” Huffman said, “and we have to look at ways that we can be smarter about what we’re doing.”
Provost Isiaah Crawford, who also spoke at the forums, echoed Huffman’s point, saying the university will work “to bring as much efficiency to our operations as we possibly can,” adding that the university may have to forego or defer some planned initiatives.
“Those tough budget decisions are going to have to be made,” said Huffman, “but (making our compensation and benefits more competitive) is a priority.”