Iowa State University University Human Resources Classification and Compensation Unit 3810 Beardshear Hall

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1 Iowa State University University Human Resources Classification and Compensation Unit 3810 Beardshear Hall

2 Table of Contents INTRODUCTION SECTION I - EXTERNAL COMPETITIVENESS Market Analysis P&S Turnover Analysis Historical Turnover Data Turnover by Gender Turnover by Years of Service Turnover by Pay Grade Professional and Scientific New Hire Analysis Pay Matrix SECTION II - INTERNAL EQUITY AND DEMOGRAPHICS General Classification Distribution Pay Grade Distribution P&S Staff Demographics Gender Distribution by Pay Grade Minority Distribution by Pay Grade Definitions Appendix A Agriculture Market Matches Science and Research Market Matches Environmental Health and Safety Market Matches Engineering Market Matches Information Technology Market Matches ii

3 INTRODUCTION We are pleased to present this special edition of the Professional and Scientific (P&S) Human Capital Annual Report. This report is prepared by the Classification and Compensation unit in the Department of University Human Resources using source data from Institutional Research (IR) and University Human Resources (UHR). Salary data used in this report reflect salaries as of October 31, 2014 (FY2015). Data provided by Institutional Research is from October 2014 and turnover data reflects information from July 1, June 30, 2014 (FY2014). The purpose of the FY2015 report is to provide data on targeted P&S classifications of strategic interest to the university and its stakeholders. The report provides analysis of turnover, salary comparison to identified markets for targeted classifications, analysis of new hire salaries, and equity demographics. Furthermore, the report assists UHR in monitoring salary trends, both internal and external to the University that affect Professional and Scientific classifications and guides the recommendations UHR makes to university administration regarding the market competitiveness of salaries. This year s report focuses on the areas of agriculture, science and research, environmental health and safety, engineering, and information technology. These areas were identified based on the demand for skills, the difficulty of recruiting for or retaining positions, and/or anticipated impact on the university s mission and vision. Compensation systems should support a competitive level with external labor markets in order to support the ability to recruit and retain qualified professional staff and support internal equity within the University. Section I, External Competitiveness, contains general information about P&S salaries of targeted classifications as compared to established salary surveys. This salary data reflects the mean of relevant markets where the University competes for talent and is compared to the average salary of targeted P&S classifications which are benchmarked against competitors. Section II, Internal Equity and P&S Demographics, provides data and information used to review equity within P&S classifications. This includes data related to the distribution of P&S staff by organizational unit, pay grades, etc. Demographic information is displayed in a number of charts that provide a general overview of the P&S population. Iowa State University complies with the Iowa Administrative Code and the Board of Regents, State of Iowa, policy on comparable worth. Furthermore, ISU is committed to diversity and gender equity. Section II, Internal Equity, provides demographic data on P&S salaries and serves as a mechanism to identify trends impacting the compensation program. Caution should be used in drawing conclusions from the data. Staff members from the Classification and Compensation unit of University Human Resources are available to provide assistance and consultation in analyzing the data. The phone number for the Classification and Compensation unit is Julie Nuter, Associate Vice President of University Human Resources - 3 -

4 SECTION I - EXTERNAL COMPETITIVENESS Market Analysis The first step in evaluating how competitive Professional and Scientific salaries are with relevant labor markets is to identify classifications to compare to market. A targeted approach was taken in the FY2015 report to identify classifications. Classifications were selected by the Classification and Compensation unit and sourced by examining areas with high impact positions that are difficult to recruit or retain. Focus areas for the FY2015 report include agriculture, science and research, environmental health and safety, engineering, and information technology. Consistent with past practices, benchmark classifications must have a minimum of three incumbents at the time data was examined, salary data must be readily available in targeted surveys, and the classification must be common to Iowa State University and relevant markets. The final list of benchmarks for FY2015 includes 30 classifications and can be viewed in more detail in the appendix. Market comparisons were made using the average ISU salary as of November 2014 for each identified classification and compared to the market data (at the mean) for a comparable position. Comparisons to market data are made on both an un-weighted average (single classification) and a weighted basis (all incumbent salaries in a classification). Please note that comparisons are made on the duties of a position (minimum of 70% match), not titles, since job titles vary widely. The data reflects the most current national and regional survey data as of December 2014 (FY2015). University Human Resources uses two primary market salary survey sources: the Economic Research Institute (ERI) database and the College and University Professional Association (CUPA) database. ERI is a single comprehensive market data source that provides human resource research for general and varied industries in the form of published reports. The database is updated quarterly and includes thousands of benchmark classifications and a compilation of hundreds of published surveys. ERI obtains national average data that can be adjusted for specific locality, region or industry. The CUPA salary database is used for select benchmark positions where there was a better match to the benchmark typically in positions unique to higher education institutions. ERI was used to benchmark all classifications in this report. Selected classifications were compared to market in December 2014 for data collected in November A visual breakdown of each area is provided in the appendix. The chart below shows the weighted and unweighted comparison to market for each targeted area. The weighted salary to market ratio was calculated by taking the sum of the ISU average salary multiplied by the number incumbents and dividing that by the sum of the corresponding market matches multiplied by the number of incumbents. A listing of all jobs for which market data was gathered and the individual comparisons to market data are shown in Appendix A and sorted by title

5 Focus Area Number of Benchmarks Number of Incumbents Un-weighted Average Weighted Average Agriculture % 86.84% Science and Research Environmental Health and Safety % 84.63% % 75.43% Engineers % 83.85% Information Technology % 95.70% P&S Turnover Analysis The following charts examine turnover for employees in Professional and Scientific positions. Turnover is defined as resignations including retirements and term appointments, but does not include transfers, promotions or demotions to other P&S positions. As such, caution should to be used when reviewing or making decisions based on this data. FY 2014 Turnover Rate by Reason Reason Count % Accepted Academic Position % Accepted Other Employment % Death % Education/Return to School % Layoff % Long Term Disability (LTD) % Non-competitive Salary % Personal % Retirement % Retirement Phased % Retirement Phased Plus % Spousal/Partner Employment % Term/Temp Appt. Ended % Grand Total % Turnover Rate = 9.8% The effectiveness of compensation practices can be measured, in part, by recruiting, hiring, and retaining qualified and competent staff. The chart above shows the number of separations that occurred during - 5 -

6 FY2014 and the reasons indicated for the separations. As the chart displays, there were 273 P&S resignations during FY2014. This is an overall turnover rate of 9.8%. Retirements accounted for 52 of the 273 positions. If retirements are factored out, the turnover rate is 8.1%. All turnover data includes retirements unless otherwise stated. Historical Turnover Data Fiscal Year FY2010 FY2011 FY2012 FY2013 FY2014 Turnover Rate The five-year turnover data shows that the turnover rate has declined since 2010 when the retirement incentive was offered. However, the turnover rate for FY2014 is historically similar to previous years. ISU s turnover rate is lower than the national average of 27.8% for a comparable workforce during FY2014 according to data from the Bureau of Labor Statistics Job Openings & Labor Turnover Survey (JOLTS). Unemployment data reported from Iowa Workforce Development reflects a state unemployment rate of 4.1% and 2.7% for Story County as of December This information can be found at The US Bureau of Labor Statistics reports an unemployment rate of 2.7% for the city of Ames as of December More information about this can be found at The following two graphs show the turnover rate as a percentage by fiscal year. The second graph excludes separations due to retirement. This gives a graphic representation of the turnover trend since FY2010. Turnover Trend Turnover Rate FY2010 FY2011 FY2012 FY2013 FY2014 Fiscal Year - 6 -

7 Turnover Trend Excluding Retirements Turnover Rate FY2010 FY2011 FY2012 FY2013 FY2014 Fiscal Year Turnover by Gender FY 2014 Turnover by Gender Gender Count Percent Female % Male % Total % Turnover by Years of Service The chart below and subsequent graphs show turnover for FY2014 broken down by years of service at the University. Turnover by Years of Service Years of Service Count Percent Less than % Less than % Less than % Less than % Less than % More than % Total % - 7 -

8 Percent of Turnover Turnover Trend by Years of Service <=1 <=2 <=5 <=7 <=10 >10 Years of Service FY2010 FY2011 FY2012 FY2013 FY2014 Turnover by Pay Grade Also examined is the impact of turnover in relation to pay grades. FY2014 Turnover by Pay Grade Pay Grade Count % of Employees in Pay Grade % Turnover % 14.65% % 4.76% % 20.51% % 18.32% % 13.19% % 8.42% % 6.23% % 6.96% % 2.93% % 1.47% % 1.83% % 0.73% Total % % - 8 -

9 Turnover by Pay Grade Comparison Percent 25.00% 20.00% 15.00% 10.00% 5.00% % Employees in PG % Turnover in PG 0.00% Pay Grade The graph above compares the percent of employees in each pay grade (blue) to the percent of employees that left the university by pay grade (red). Pay grades had a higher rate of turnover than the percent of total University employees that they represent. Professional and Scientific New Hire Analysis New Hires by Pay Grade Pay Grade No. of Hires At Minimum Within First Third Between 1st third and Midpoint Above Midpoint Totals

10 Iowa State University's pay policies allow for hiring supervisors to offer salaries for new hires up to the first third of the respective pay grade without additional review. This practice provides hiring supervisors some latitude to address issues such as exceptional qualifications, individual salary requirements, market conditions, and previous salary history. Offers above the first third require additional review and approval. Justification for starting salary offers above the hiring range may include, but are not limited to, exceptional individual qualifications, market competitiveness, and internal equity. The pie graph below indicates that the majority (approximately two thirds) of P&S new hires have been made within the hiring range during FY2014. Breakdown of New Hire Starting Salaries FY14 17% 13% 3% At Minimum Within First Third 67% Between 1st third and Midpoint Above Midpoint Source: Human Resource Services Pay Matrix The Professional and Scientific pay matrix for FY2015 has twelve (12) ranges of pay: pay grades P30 P41. The grade of any given classification is based on the outcome of a job factor evaluation system that measures seven compensable areas: knowledge and education, complexity, innovation, impact on institutional mission (scope), internal interactions, external interactions and leadership. The University s pay structure reflects a hierarchy based on internal evaluation of jobs. For FY2015, analysis of market factors affecting pay structures was researched and evaluated. Based on the research of market trends, the university adjusted the pay matrix. All pay grades were adjusted by +1.25% on July 1,

11 2014/2015 Professional and Scientific Salary Matrix (Effective July 1, 2014) P&S Salary Matrix Level Minimum 1st Third Midpoint Maximum 41 $95,852 $121,397 $134,296 N/A 40 $83,858 $106,206 $117,380 N/A 39 $73,607 $96,915 $108,569 $143, $65,768 $84,402 $93,720 $121, $57,609 $73,933 $82,095 $106, $52,374 $67,213 $74,631 $96, $45,927 $58,940 $65,446 $84, $40,467 $51,932 $57,665 $74, $38,047 $47,558 $52,314 $66, $34,523 $43,154 $47,470 $60, $31,393 $38,717 $42,380 $53, $28,968 $35,244 $38,382 $47,

12 SECTION II - INTERNAL EQUITY AND DEMOGRAPHICS The following information and graphs reflect metrics related to the Professional and Scientific employee population. Data displayed outlines relationships between P&S employee distributions by organizational units and pay grades. This section also provides information on Professional and Scientific staff demographics. General Classification Distribution The graph below contains information provided by Institutional Research. It shows the number of full-time equivalent (FTE) positions among P&S, Merit, and Faculty, and the change in staffing levels over a five-year period. ISU data continues to reflect that the Professional and Scientific classification represents the largest number of employees at the University. Number of Full-Time Equivalent Employees 3,000 2,500 2,000 1,500 1, Employee FTE by Group Distribution Faculty Professional and Scientific Merit Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Source: Institutional Research

13 The chart below shows the number of employees in the major divisions at ISU as of October 2014 (FY15) by pay grade groupings. Number of Employees Source: Institutional Research The following chart shows the distribution of total employees in the major divisions over a five- year span. A snapshot of the data was taken in October for each fiscal year. Number of Employees Academic & Research Academic & Research Source: Institutional Research P & S Distribution by Organizational Unit and Pay Grade as of October Ames Lab Bus & Finance Extension Office of the President Ames Lab Pay Grade Bus & Finance Extension & Outreach P & S Distribution by Organizational Unit as of October Organizational Unit Office of the President Student Affairs Student Affairs

14 Pay Grade Distribution The following chart shows a side-by-side distribution of the number of employees within each pay grade as of October 2014 (FY15). P&S Distribution by Pay Grade as of October 2014 Number of Employees Pay Grade The following chart shows the average salary by pay grade. Average FTE Salaries Compared to First Third and Midpoint $200, $150, Salary $100, $50, Average FTE Salary First Third Midpoint $ Pay Grade

15 P&S Staff Demographics Gender Distribution by Pay Grade The first chart below reflects the female to male ratio in each pay grade. The second chart compares salaries between males and females within each pay grade from October 2014 (FY15). Percent of Staff by Gender 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Pay Grade Source: Institutional Research Distribution by PG and Gender Grand Total Male Female Male Female FTE Average Salary $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Distribution of P & S Staff by Pay Grade, Gender and Average Full-Time Equivalent Salary as of October Pay Grade Female Male Source: Institutional Research

16 Minority Distribution by Pay Grade The first graph shows the ratio of minority to non-minority employees sorted by pay grade. The second graph compares the salaries of the two groups by pay grade. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total Non-Minority Minority Pay Grade Source: Institutional Research Percent Minority Headcount of Minority/Non-minority P&S Staff by Pay Grade, October 2014 Non- Minority Minority $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $ Pay Grade Source: Institutional Research FTE Average Salary Distribution of Minority/Non-Minority by Pay Grade and Average Full-Time Equivalent Salary as of October 2014 Minority Non-Minority

17 Definitions Benchmark positions or Key Jobs A typical job, or group of jobs, used as reference points for making pay comparisons within and/or external to the organization. Benchmark jobs are used in salary surveys for wage comparisons with the external labor market. Comparable Worth - A provision within Iowa law. It means the value of work as measured by the composite of the skill, effort, responsibility and working conditions normally required in the performance of work. It is one form of internal equity between like jobs within the University. Exempt Refers to a position that is not eligible for overtime pay based on guidelines set by the Fair Labor Standards Act (FLSA). External Competitiveness Refers to the pay relationships among organizations and focuses attention on the competitive positions reflected in these relationships. FLSA The Fair Labor Standards Act of 1938 is a federal law that established regular working hours, overtime pay at time and a half regular wages, child labor and defined specific exempt occupations. FTE - Full Time Equivalent (FTE) is a unit of measure which is equal to one full time, annual-salaried position. One FTE is typically measured at 2,080 hours per year. Part-time and part-year employees are expressed as a portion of a full FTE based on the number of hours and percentage of time worked. Hiring Range The first-third of each salary grade where most new hire salaries should fall. Internal Equity Refers to the pay relationships among jobs within a single department, college/division or the entire organization. It involves establishing equal pay grades and standards for jobs of equal worth and acceptable pay differentials for jobs of differing worth. Job Classification Individual positions having comparable duties and responsibilities. Job Family Jobs involving work of a similar nature having different skill and responsibility levels. A job family will consist of several job groups. Job Group A series of jobs grouped on the basis of common skills, qualifications, technology, workplace, career paths and organizational tradition. A job group will consist of several job series. Job Series - A group of classifications representing progressively higher levels of skill, experience, complexity and responsibility. Labor Market - The labor market is a group within the labor force whose members could fill a particular job. Labor markets could be local, regional, or national depending on the classification of the position. Market Ratio Percent of the comparison between the actual salaries and the market salaries

18 Mean Sometimes referred to as the simple average. The mean is calculated by adding the total of all items and dividing by the number of items added. For instance, the process to find the mean of five salaries would be to add all five salaries and then to divide by 5. Median Value that separates the highest half of the sample from the lowest half. To find the median, arrange all the observations from lowest value to highest value and pick the middle one. Non-Exempt Refers to positions that are entitled to overtime pay based on the Fair Labor Standards Act (FLSA). Pay Differentials Pay differences among levels within the organization, such as the difference in pay between adjacent levels in a career path, between supervisors and subordinates, between union and nonunion employees, and between executives and other employees. Pay Grade One of the classes, levels, or groups into which jobs of the same or similar values are grouped for compensation purposes. All jobs in a pay grade have the same pay range maximum, minimum, and midpoint. Pay Range The range of pay rates from minimum to maximum set for a pay grade or class. Position Tasks grouped together to form a job and classified based on level of responsibility and qualifications. Positions can be full-time or part-time and are designed to meet unique organizational needs. Range Midpoint The salary midway between the minimum and maximum rates of a salary range. The midpoint rate for each range is usually set to correspond to the pay policy for the particular institution. Turnover Rate The percentage of an organization s positions that became vacant during a period of time. The turnover rate is calculated by taking the number of resignations that occurred during the period divided by the number of positions that were in the organization at the time. For example, if there were 200 positions in an organization over the period of calendar year and 20 of them became vacant during that period of time, then the turnover rate would be 10%. Weighted Average / Weight Ratio An average that takes into account the proportional relevance of each component, rather than treating each component equally

19 Appendix A The following charts show the market matches for targeted benchmark positions with the weighted and unweighted average by focus area. Market data was collected in December Agriculture Market Matches University Title Pay Grade Average Annual FTE Salary Agricultural Specialist II* Agricultural Specialist III* Agricultural Specialist IV* Number of Incumbents Industry Survey Mean Market Ratio 32 $43, ERI DSM $48, % 33 $50, ERI DSM $59, % 34 $60,205 9 ERI DSM $73, % Un-weighted Average: 86.11% Weighted Average: 86.84% Science and Research Market Matches University Title Pay Grade Average Annual FTE Salary Number of Incumbents Industry Survey Mean Market Ratio Assistant Scientist I* 33 $48, ERI DSM $52, % Assistant Scientist II* 34 $54, ERI DSM $66, % Assistant Scientist IV 36 $78,029 5 ERI DSM $83, % Associate Scientist* 37 $76, ERI US $91, % Research Associate I* 30 $35, ERI DSM $45, % Research Associate II* 32 $42, ERI DSM $52, % Scientist I* 38 $97, ERI US $103, % Scientist II* 39 $115, ERI US $119, % Un-weighted Average: 87.48% Weighted Average: 84.63% *Reflects a change in industry and/or market match

20 Environmental Health and Safety Market Matches University Title Environmental Specialist III Industrial Hygienist II* Industrial Hygienist III* Pay Grade Average Annual FTE Salary Number of Incumbents Industry Survey Mean Market Ratio 35 $62,487 6 ERI DSM $88, % 34 $56,965 4 ERI DSM $70, % 35 $66,203 3 ERI DSM $83, % Un-weighted Average: 77.06% Weighted Average: 75.43% Engineering Market Matches University Title Pay Grade Average Annual FTE Salary Number of Incumbents Industry Survey Mean Market Ratio Engineer Designer 34 $54,085 9 ERI DSM $64, % II* Engineer III* 35 $66, ERI DSM $77, % Engineer IV* 36 $76,089 6 ERI DSM $93, % Un-weighted Average: 83.65% Weighted Average: 83.85% *Reflects a change in industry and/or market match

21 Information Technology Market Matches University Title Pay Grade Average Annual FTE Salary Number of Incumbents Industry Survey Mean Market Ratio Analyst/Programmer* 33 $49, ERI DSM $59, % Director ITS I* 38 $116,000 4 ERI US $132, % Information Systems Leader* Manager Information Technology I* Manager Information Technology II* 37 $97,766 8 ERI US $115, % 36 $82, ERI DSM $91, % 37 $92,658 4 ERI US $110, % System Analyst I* 34 $55, ERI DSM $61, % System Analyst II* 35 $66, ERI DSM $69, % System Analyst III* 36 $78, ERI DSM $81, % System Support Specialist I* System Support Specialist II* System Support Specialist III* System Support Specialist IV Systems Analyst, Senior* Industry Key ERI DSM = ERI General Industry (Des Moines) ERI US = ERI General Industry (United States) 31 $42, ERI DSM $42, % 32 $46, ERI DSM $47, % 33 $56, ERI DSM $54, % 34 $64, ERI DSM $62, % 37 $96, ERI DSM $91, % Un-weighted Average: 93.89% Weighted Average: 95.70% *Reflects a change in industry and/or market match

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