KEY FINDINGS

Cash Compensation & Benefits

• The pressure on Information Technology positions which led the University to set the target market position at the 75th percentile is no longer present.
• Cash compensation in general aligned with the market 50th percentile total cash (base plus annual incentives/bonuses).
• "Larger" jobs are generally compensated slightly below the targeted market level (see the chart below).
• Benefits are very competitive compared to a database of 161 northwest organizations (see charts below).
• Twelve of thirteen institutions of higher education offer a defined contribution retirement plan. Half of these organizations offer a median match of 8.3% of base pay.
• Ten of twelve institutions of higher education offer a defined benefit pension plan in contrast to the UWRP, the retirement plan for UW professional staff, which is a defined contribution plan. For a typical employee, it has an annual value of roughly 8%.

The first chart below illustrates the "trend" of University actual cash compensation compared to the data collected during this analysis. For jobs below roughly $60,000 in market value, the University pays at the market median (50th percentile) total cash. For jobs above $60,000 in market value, the University pays below the market median and progressively below as the jobs increase in market value.

• Cash Compensation Comparisons
• Medical Benefits Comparisons
• Dental Benefits Comparisons
• Total Retirement Comparisons
• Life Insurance Comparisons
• Retiree Medical Benefits Comparisons

Days of paid vacation compared to northwest organizations:

	1 Year	5 Years	10 Years	15 Years	25 Years	# Paid Holidays
UW	15.0	19.0	24.0	24.0	24.0	11
Average	13.9	18.1	21.3	23.9	26.0	9
Median	12.0	16.0	20.0	22.0	25.0	9

Days of paid vacation compared to higher education institutions:

	1 Year	5 Years	8 Years	10 Years	15 Years	25 Years	# Paid Holidays
UW	15.0	19.0	22.0	24.0	24.0	24.0	11.0
Average	15.4	17.4	17.8<	21.4	22.9	24.6	11.7
Median	15.0	15.0	15.0	18.4	20.3	22.8	12.0

Short-term disability compared to higher education institutions:

	Short-Term Disability
	STD Offered	Wait Period	% of Sal	% Employer Pays	Cost	Max Time Off (days)
UW	Yes	90	60%	72%	$3.80	90
Average	61.5%	17	68%	50%	$0.58	135
Median		15	66%	50%	$0.50	125

Recommendations

• Compare salary levels to the market median (50th percentile) instead of the market average for the following reasons:
  • Statistically more stable
  • Outliers have less impact
  • Participant changes have less impact
  • Without a variable pay plan, the University should take into account the other cash compensation available in the market by targeting market total cash
• Return to the market 50th percentile total cash compensation as a market target for Information Technology positions
• Departments should review those titles that are significantly below market for potential adjustment
• Review feasibility of separating health care positions from the professional staff compensation structure
  • Consider market pricing these jobs individually
• Review feasibility of separating other positions from the professional staff compensation structure to better align with market
• Utilize a 50% wide range for all positions
• For Information Technology jobs, a wider range is likely to be necessary as a transition for one to two years
• Maintain mandatory minimums to ensure competitive and fair initial compensation

Competitive Practices - General Industry

To maintain competitive compensation, organizations budget a certain percent of payroll each year for pay adjustments. In the education sector for 2007, pay adjustments for exempt employees and executives were 3.5% and 3.6% respectively. Increase budgets for 2008 are 3.7% and 3.6% respectively.

In general industry, 2007 pay increase budgets were 3.9% for exempt employees and 4.1% for executives. Projections for 2008 are 3.9% for exempt positions and 4.0% for executive positions.

Base salary adjustments have remained relatively stable for more than ten years. One significant factor contributing to this stability has been the increased use of variable compensation (i.e. incentives and bonuses). The majority of companies that the University competes with for labor talent offer variable pay opportunities of one kind or another (approximately 70%+). Of the universities responding to the custom survey, six reported providing an incentive to at least one position.

Long-term incentives, most typically in the form of stock options, are common at the senior management level in most private sector companies.

Relocation packages are commonly used when the cost of living and the cost of labor in an area like Puget Sound is significantly higher than the national average.

Next - Survey Methodology

• uwhr@uw.edu |
• HR Contacts

Copyright © 2007 University of Washington