Strategic Total Compensation Packages

Strategic Total Compensation Packages

Our compensation management consulting includes working with private and public organizations. The public organizations include cities, counties, utilities, school districts, and libraries. Often, we hear the public organizations’ authority councils, quorum courts, and boards request the total compensation strategy of lagging the market pay average due to significant employer contributions made to the employees’ defined benefit retirement plans and in some instances higher cost-sharing percentages for employee health insurance premiums.

Private and public organizations need to evaluate their respective total compensation plans (wages and benefits) to become more strategic due to the increasing demand for employees with skills and competencies to help the organizations achieve current and future goals and services.

Most public organizations with defined benefits retirement plans are contributing double-digit percentages of employees’ base wages to these unfunded liability plans.  This benefit has greater value and meaning for existing employees with five or more years of service with the public employer.  For new employees entering the workforce, the defined retirement benefit may not attract skilled workers, competent professionals, and potential managers and leaders who have various options to join private employer businesses. The private businesses have the resources to offer higher initial wage/salary offerings, variable and bonus pay plans, defined contribution retirement plans with a profit sharing component and opportunities for greater income growth through internal position promotions and efforts to pay employees at the market pay mean within three to five years.

Total compensation packages are becoming more strategic and variable as demand for talented and skilled workers exceeds the supply.  We encourage both private and public employers to stay competitive with their employee base wage/salary structures and benefit offerings.


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