Vol. 38, No. 18

4-6-2004
By: Susan Wittstock

2004 Compensation Benchmark Study: Positive momentum toward goals noted

In preparing for making compensation recommendations for fiscal year 2005, university administrators presented a compensation benchmarking study to the Board of Trustees on April 2.

Interim Executive Vice President and Provost Barbara Snyder introduced the presentation.

“This is the time of year where we examine compensation competitiveness and make plans for next year’s budget. We have achieved very positive momentum, and hope to continue our progress despite the many budget challenges we face,” she said.

Because of state funding cuts, the university has had to make significant budget reallocations in recent years, said Larry Lewellen, associate vice president for human resources.

“Additional reallocation plans have had to be undertaken by colleges and administrative units in order to fund raises,” he said. “Consequently, positions have had to be eliminated over time to free up the funds.”

The university will need to slow down the elimination of positions, which can cause stress and burnout for those remaining, and also needs to focus on creating a positive work/life environment, Lewellen said, and stated that work/life balance can be almost as important as salary and benefits in retention and maintaining commitment levels of talented faculty and staff.

“With those cautions noted, we have seen significant improvements in faculty and staff competitiveness during the last two years, and salaries do still remain behind market,” Lewellen said. “Going forward, it will be a challenge to balance our compensation priority with other critical priorities.”

The study compared Ohio State’s average faculty salaries with those of benchmark institutions for each of the past five years, compared staff salaries to external markets and the state of Ohio, examined how Ohio State invests its salary dollars in terms of gender and ethnicity, and compared the cost of benefits at Ohio State with other institutions.
The benchmark institutions are ranked higher academically than Ohio State, but are similar in mission, size and scope. They are the universities of Arizona, California at Los Angeles, Illinois, Michigan, Minnesota, Texas at Austin, Washington, Pennsylvania State and Wisconsin.

Lewellen reported that for 2003-04, Ohio State’s average faculty salary of $82,780 is 1.7 percent below the benchmark average of $84,190. Two years ago, Ohio State’s average salary was $74,840, or 6.1 percent below the benchmark average of $79,670.

“This is phenomenal progress over the past two years, due to the high commitment of the deans and vice presidents,” he said.

When looking at just the past two years for budget allocations for faculty salary increases, the average two-year total is 3.8 percent; Ohio State’s total increase adds up to 8.4 percent.

The presentation also included a look at how Ohio State’s salaries rank when compared to the 60 members of the Association of American Universities, which are the premier doctoral-granting institutions in the U.S. and Canada. Currently, Ohio State salaries are ranked 40th in the group.

“This is the first year in a while that we haven’t slipped in the rankings. Last year, we were 46th,” Lewellen said. “Fifteen years ago we were ranked 21st; 10 years ago we were 37th; and five years ago we were 39th. This shows we still have work to do, as much of our faculty recruitment occurs within the AAU institution group.”

A comparison of staff salaries to external markets for 2003-04 shows that Ohio State is well below market in almost all occupational groups, although every job category except skilled craft moved closer to the market rate than in 2002-03.

The results, by category, show: managers and administrators, 7.6 percent below average; professional, 10.4 percent below average; paraprofessional, technical, 13.5 percent below average; skilled craft, 10.9 percent below average; and service, maintenance, 8.6 percent below average.

Only clerical and secretarial positions are above average by 7.0 percent. “We have a significant number of long-service people raising the average, but we believe that the remainder of this group is probably also below market,” said J Henderson, director of compensation.

Staff salaries, compared to the state of Ohio for 2003-04, are not as disparate, but also tend to lag behind.

The report included a study of total investments (all base salary increases and cash bonuses) for 2003-04 by classification. “We found that the distribution patterns of base increases and bonuses have been favorable for women and minority faculty and staff,” Henderson said.

In terms of gender, the study found that male employees received, on average, a 3.54 percent salary increase, while females received a 3.67 percent increase. Specifically, male faculty received 3.58 percent while female faculty received 3.83 percent; male administrative and professional employees received 3.49 percent while females received 3.7 percent; and male classified civil service (CCS) received 3.43 percent while females received 3.49 percent.

Minority faculty received, on average, a 3.65 percent increase, while white faculty received 3.59 percent. Administrative and professional minority employees received 3.63 percent; white administrative and professional employees received 3.6 percent. There was a 3.46 percent increase for minority CCS staff and a 3.49 percent increase for white CCS staff.

“This appears to be a positive effort by colleges and units to address systemic pay differences for women and minority faculty and staff,” Henderson said. “This has been consistent since we started measuring this two years ago.”

The report also included a cost comparison for benefits among 20 higher education institutions. The average estimated health care cost per person for 2004-05 is $4,494; Ohio State’s cost is projected to be $4,278.

“Health care costs are one of the items tagged by the Board of Trustees for cost management. Our goal is to maintain our strong competitive position but reduce the cost trend to less than 10 percent annually,” Lewellen said. “In partnership with the Medical Center, we’re hopeful that the work now underway by the Health Care Investment and Design Committee will help us to achieve that goal. The Medical Center’s evolution toward a personalized health care model will be a key factor.”

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