Biennium Compensation Report – 2023, Virginia Department of Human Resource Management (January 4, 2024)
Summary
Biennium Compensation Report – 2023 of the Virginia Department of Human Resource Management, with a cover letter dated January 4, 2024 from Janet L. Lawson, Director to Luke E. Torian, Chairman, House Appropriations Committee, and L. Louise Lucas, Chair, Senate Finance and Appropriations Committee. The letter states that Deloitte Consulting, LLP in conjunction with DHRM benchmarked 204 Commonwealth occupations against private and public sector comparators. It says base salaries of the selected roles lag the market average -13% and -9% respectively versus the private and public sector, and that approximately 9% of benchmarked roles are above the private sector market median. It states that the compensation methodology recommended by the 2020 mandated Compensation Workgroup was not adopted.
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“Biennium Compensation Report – 2023, Virginia Department of Human Resource Management (January 4, 2024).”
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James Monroe Building
JANET L. LAWSON
DIRECTOR
COMMONWEALTH OF VIRGINIA 101 N. 14th Street, 12th Floor
Richmond, Virginia 23219
Department Of Human Resource Management Tel: (804) 225-2131
(TTY) 711
January 4, 2024
The Honorable Luke E. Torian, Chairman, House Appropriations Committee
The Honorable L. Louise Lucas, Chair, Senate Finance and Appropriations Committee
The Honorable Margaret Lyn McDermid, Secretary of Administration
Subject: Biennium Compensation Report – 2023
The attached report is pursuant to § 2.2-1202 B. of the Code of Virginia which requires that:
B. The Director of the Department shall, on or before September 1 of each odd-numbered year, submit
a report on (i) the classified job roles that should receive higher salary increases based on identified
recruitment and retention challenges, (ii) the appropriate amount by which the salary of such classified
job roles should be increased, and (iii) cost estimates for funding any salary increases to the Governor
and the Chairmen of the House Committee on Appropriations and the Senate Committee on Finance
and Appropriations.
Deloitte Consulting, LLP in conjunction with DHRM, benchmarked 204 Commonwealth occupations
against private and public sector comparators. The population of benchmarked roles selected for the
study includes a diverse mix of management, professional, support, and technical positions aligned
across the full range of Commonwealth salary bands covering classified roles.
The study demonstrates base salaries of the selected roles in the Commonwealth lag the market
average -13% and -9% respectively versus the private and public sector. Recent statewide salary
adjustments yielded improvement. Approximately 9% of benchmarked roles are above the private sector
market median.
The compensation methodology recommended as part of the 2020 mandated Compensation Workgroup
to address these issues was not adopted. Reconsideration of the workgroup’s recommendations should
be explored as a means to provide relief from the ongoing stress on the compensation infrastructure.
This report presents recommendations, as indicated on page 18 of the attached report, to properly align
strategic workforce methodologies that will address increasingly problematic challenges with employee
pay, compression, recruitment, and retention.
Sincerely,
Janet L. Lawson
An Equal Opportunity Employer
Virginia Department of Human Resource Management
Biennial Compensation Report
Occupational Recruitment, Retention, & Market Position Analysis of the
Commonwealth’s Classified Workforce
Data as of August 2023
Report as of November 2023
Table of Contents
Executive Summary .............................................................................................................. 3
Introduction ......................................................................................................................... 5
Purpose .................................................................................................................... 5
Background.............................................................................................................. 5
Classification Structure and Position Selection Methodology ................................ 6
Report Findings .................................................................................................................... 8
Compensation Benchmark Study and Salary Increases ........................................... 8
Recommendation ................................................................................................................. 9
Project Methodology.......................................................................................................... 10
Compensation Market Review ........................................................................................... 11
Base Salary Findings – Overall Variance to Market: Current ................................. 11
Base Salary Findings – Overall Variance to Market: Trend Analysis ...................... 11
Base Salary Findings – Significant Variance to Market.......................................... 12
Base Salary Findings – Salary Band Analysis ......................................................... 12
Base Salary Findings – Variance by Secretary ....................................................... 13
Base Salary Findings – Targeted Salary Increases to Market ................................ 14
Salary Increase Guidelines .................................................................................................. 16
Historical Background ............................................................................................ 16
2024 Projections.................................................................................................... 16
Annual Funding Recommendations....................................................................... 17
Compensation Implementation Recommendations ............................................. 18
Illustrative Example ............................................................................................... 18
Appendix A: Enacted Amendments .................................................................................... 19
Appendix B: Market Review Methodology ....................................................................... 21
Appendix C: Salary Increase Market Data ......................................................................... 22
2|Page
Executive Summary
Deloitte Consulting, LLP (“Deloitte”) in conjunction with DHRM benchmarked the salaries of
204 roles in Commonwealth occupations against private and public sector comparators. The
population of benchmarked roles selected for the study includes a diverse mix of
management, professional, support, and technical positions aligned across the full range of
Commonwealth salary bands covering classified roles.
As noted above, the study focuses on employee salaries compared to market. The study has
not compared the total compensation of classified Commonwealth employees – the value of
salaries and benefits – to market.
The 2023 Biennial Compensation Report produced the following findings:
• On average, base salaries in the Commonwealth among the positions
benchmarked fall below the market by 13% and 9%, respectively, versus the
private and public sectors. Approximately 9% of the benchmarked roles are
more than 20% above private sector market median salary.
• Statewide salary adjustments have brought salaries closer to market.
However, the salaries of almost 20% of classified employee in benchmarked
roles fall below each market 25th percentile.
• On average, when the market data is compared to the Commonwealth
salary bands, which generally function as broad bands:
− The minimums of the Commonwealth salary bands fall 36% and 33%
below the private sector and public sector market 25th percentiles,
respectively.
− The midpoints approximate the private sector data and fall 5%
above the public sector data.
− The maximums fall 25% and 31% above the private sector and public
sector market 75th percentiles, respectively.
• On average, the salaries of Commonwealth employees generally fall in the
second quartile of the Commonwealth salary bands.
In general, inconsistent appropriated salary adjustments have made it difficult for state
agencies to build a proactive and sustainable approach to addressing compensation
concerns.
• The current classified salary structure has become reactive and critically
distressed over time.
• The statewide adjustment method of awarding flat rate increases has continued
to put stress on the classified salary structure and has accelerated compression
3|Page
issues in the lower pay bands.
• Proposed minimum wage increases (in January 2025 and January 2026) may
further exacerbate compression in pay bands 1 through 4.
• The compensation methodology recommended as part of the 2020 mandated
Compensation Workgroup to address these issues has not been adopted.
DHRM is re-recommending this methodology be implemented to help alleviate
structural collapse and to enable Commonwealth agencies the autonomy to
proactively address recruitment, retention, and compression challenges.
4|Page
Introduction
Purpose
This report overviews the market position of the Commonwealth’s compensation program for
classified roles compared to similar jobs in private industry and other public sector
organizations. This report also analyzes the impact of several economic conditions affecting the
Commonwealth’s workforce, including:
• Current salary structure compression in pay bands 1-4,
• Distortion of salary structure ratios in pay bands 5-9, and
• The current employee salary adjustment methodology versus a variable methodology.
The analysis presented in this report is limited to classified salaried Commonwealth roles
whose terms and conditions of employment are subject to the Virginia Personnel Act (VPA).
The analysis is also limited to data readily available to the Department of Human Resource
Management (DHRM) and its central Human Resource Management Systems. Understanding
that each individual state agency is in the most advantageous position to analyze and manage
its workforce and distinct lines of business, the Commonwealth of Virginia maintains a
decentralized salary administration plan and program. This approach delegates authority and
accountability to individual agencies.
DHRM is using the data in this report to (i) illustrate the Commonwealth’s overall workforce
position and (ii) identify market rates of pay for occupations with recruitment and retention
issues. It is not intended to identify specific and unique agency workforce challenges.
Background
The Commonwealth’s Compensation Philosophy, codified in 2001, states that the “goal of the
Commonwealth to compensate its employees at a rate comparable to the rate of compensation
for employees in the private sector of the Commonwealth in similar occupations, and
consistently recruit and retain the most suitably qualified employees.”
Pursuant to § 2.2-1202 of the Code of Virginia:
B. The Director of the Department shall, on or before September 1 of each odd-numbered year,
submit a report on (i) the classified job roles that should receive higher salary increases based
on identified recruitment and retention challenges, (ii) the appropriate amount by which the
salary of such classified job roles should be increased, and (iii) cost estimates for funding any
salary increases to the Governor and the Chairmen of the House Committee on Appropriations
and the Senate Committee on Finance.
5|Page
DHRM, with assistance from Deloitte, has compared the base salaries of a sample of difficult to
fill and retain classified Commonwealth roles to benchmark base salary data representing the
public and private sectors. This report documents the market study findings and answers these
key questions:
• How do base salaries for a sample of classified Commonwealth roles where attraction
and retention struggles exist compare to public and private sector salaries?
• What are the projected salary increases for the public and private sectors in 2024?
The market data for this year’s compensation study, which includes projections for base
salary increases, were gathered from multiple published compensation surveys. Market
comparisons were based on an analysis of position duties and responsibilities; comparisons
to market were not made solely on a job title basis.
Classification Structure and Position Selection Methodology
The Commonwealth's classified workforce is composed of just over 57,000 employees
across 12 agencies.
A Commonwealth classified role or job code title describes a broad group of occupationally
related positions that represent different levels of work and career progressions. Roles are
further defined by individual agencies through working titles aligned to specific position
responsibilities. The current classification structure and the diverse nature of services provided
by the Commonwealth’s agencies leads to multiple and wide-ranging occupations represented
within a single job code.
Table 1 shows how different Commonwealth departments use various position working titles
within the same job code title and how the same position working title is used within different
job code titles by different departments.
Table 1
Job Code Job Code Title Position Working Title Department Grade
19013 Admin and Office Spec III Assistant Accountant Fiscal Division 3
19013 Admin and Office Spec III Accountant Class, Adm Fac, 12mth Pro Fac 3
19031 Financial Services Spec I Accountant Senior Finance and Administration 4
19031 Financial Services Spec I ACCOUNTANT OPR Bank Reconciliation 4
19031 Financial Services Spec I Accountant FINANCE 4
19031 Financial Services Spec I Senior Accountant FINANCE 4
19031 Financial Services Spec I Accountant Financial Services 4
19221 Gen Admin Supv I/Coord I Accountant Business Office 4
19032 Financial Services Spec II Senior Accountant Financial Srvs 5
19032 Financial Services Spec II Accountant Financial Management Services 5
6|Page
The population of benchmarked roles includes a diverse mix of management, professional,
support, and technical positions aligned across the full range of Commonwealth salary bands
covering classified roles.
7|Page
Report Findings
Compensation Benchmark Study and Salary Increases
Key findings from the study are shown in Figure 1:
Figure 1
Salary Values
• On average, base salaries are 13% and 9% below market median private sector and public
sector base salary data, respectively
• The average salaries for 18 positions are more than 20% above the market median private
sector base salary data; the average salaries for 22 positions are more than 20% above the
market median public sector base salary data
• The average salaries of 84 positions are more than 20% below the market median private
sector data base salary data; the average salaries of 68 positions are more than 20% below
the market median public sector base salary data
• When reviewed on an agency basis, base salaries, on average, range from 28% below
market medians in roles within the Secretariat of Commerce and Trade to approximating
market medians in roles within Public Safety and Homeland Security
• On average, the Commonwealth salary band minimums fall significantly below the market
25th percentile salaries, the midpoints align to market medians, and the maximums are
25% and 30% above the 75th percentile private sector and public sector data, respectively
Salary Increases
In the prior two years, the Commonwealth provided targeted salary increases to address
below-market salaries; these Commonwealth general salary increases aligned with market
General salary increases for the Commonwealth totaled 7% in 2023 (5% in June and 2% in
December); market median salary increases in 2023 were 4%
Market median projections for salary increases in 2024 are 4%
Since 2001, there have been seven years where general salary increases were not provided
to Commonwealth employees; from 2001 to 2023, Commonwealth salary increases have
averaged 2.9% while general industry and government sector market median salary
increases have averaged 3.4% and 3.5%, respectively
Across pay bands 1–4, nearly 1,300 classified employee salaries fall below the general
industry 25th percentile base salary data; across the same bands, nearly 1,200 employee
salaries fall below the government sector 25th percentile data
In 2021, Deloitte recommended the Commonwealth appropriate funds each year for annual
salary increases; the Commonwealth has yet to formalize and implement an annual salary
increase process
8|Page
Recommendation
This report identifies (i) the classified job roles that should receive higher salary increases
based on identified recruitment and retention challenges, and (ii) the appropriate amount by
which the salary of such classified job roles should be increased.
To keep pace with market competitors, annual employee increases should be consistent and
prioritized. It is recommended that appropriated employee adjustments be included as part of
the biennial budget development process based on reported market movement. This will allow
the Commonwealth to move to a sustainable and steady methodology to address compression,
recruitment, and retention risks.
When considering the wide range of the multi-industry and multi-occupational workforce, it is
recommended that the Commonwealth adopt a modern and market-based approach to salary
adjustments. Further, empower each agency to award variable increases based on established
metrics such as a performance multiplier component and a market variance component (as
outlined above). This will give each agency discretion to address unique workforce challenges
while protecting the stability, equity, and integrity of overall compensation strategies and
structures. This will also support the financial accountability of the Commonwealth’s
compensation approach as well as maximize the workforce impact of appropriated funding.
9|Page
Project Methodology
Deloitte used the approach shown in Table 2 to help DHRM identify Commonwealth
occupations with recruitment and retention challenges, understand pay program
competitiveness, and analyze historical salary increases compared to market.
Table 2 Compensation study Salary increase analysis guidelines
Select jobs to benchmark using: Use the following to develop salary increase
guidelines:
Commonwealth recruitment and
retention data; roles were selected with Position recruitment data
a long time-to-fill rate 1
The benchmark study results
Inputs
The number of incumbents in each
Salary budget surveys to identify leading
occupation; positions were selected
market practice for merit and total salary
covering a large number of employees 2
increase budgets
Job levels; positions were selected
covering a diverse mix of management,
professional, support and technical staff
Outputs Benchmark study results Salary increase recommendations
DHRM was helped by Deloitte to:
• Compare the market data findings to (i) classified Commonwealth employee salaries and (ii) the
Commonwealth salary bands covering the classified positions benchmarked, and
• Compare historical salary increases for Commonwealth classified employees to market
practice salary increase data.
1 Commonwealth Time-to-Fill rate is effective as of September 23, 2023. The time-to-fill rate among the positions selected for the benchmark study average
166 days.
2 The number of employees in the positions selected for the benchmark study is effective as of September 23, 2023; the average number is 39 and the maximum
number is nearly 4,400.
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Compensation Market Review
Base Salary Findings – Overall Variance to Market: Current
Deloitte compared Commonwealth employee salaries of the benchmarked roles to market
data illustrating the 25th, median/50th, and 75th percentiles of public and private sector data.
Deloitte understands that select Commonwealth agencies have historically applied market-
based differentials to national market data to recognize differences in the local cost of labor
and recruiting difficulties for select occupations in certain locations. Deloitte did not apply
differentials to the market data compiled for this analysis.
Table 3 shows base salaries on average:
• Approximate the 25th percentile of the private sector market median data
• Fall between the 25th and 50th percentile public sector market median data
Table 3
Overall Variance to Market Median
Private Sector Market Data Public Sector Market Data
Base Salaries Base Salaries
25th Percentile Median 75th Percentile 25th Percentile Median 75th Percentile
-0.4% -13.1% -25.4% 4.5% -9.1% -21.7%
Base Salary Findings – Overall Variance to Market: Trend Analysis
Table 4 shows how Commonwealth salaries have compared to market over the past three
market studies. In most instances, Commonwealth classified employee salary position relative
to market, on average, has increased a few percentage points with each study.
Table 4
Overall Variance to Market Median
Year Private Sector Market Data Public Sector Market Data
Base Salaries Base Salaries
25 th
Percentile Median 75 th
Percentile 25 th
Percentile Median 75th Percentile
2020 -6.2% -16.5% -26.2% 1% -10.1% -20.7%
2021 -2.6% -15% -25.4% 2.1% -11.3% -22.5%
2023 -0.4% -13.1% -25.4% 4.5% -9.1% -21.7%
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Base Salary Findings – Significant Variance to Market
Table 5 shows the number of roles with base salaries significantly greater than or less than
market median rates:
• Average salaries for classified employees in one-half of the benchmarked roles are
more than 20% below or more than 20% above private sector market median salary
• Average salaries for classified employees in 44% of benchmarked roles are more than
20% below or more than 20% above public sector market median salary
Table 5
Private Sector Market Data Public Sector Market Data
Base Salaries Base Salaries
More Than More Than More Than More Than
% Of Total % Of Total % Of Total % Of Total
20% Above 20% Below 20% Above 20% Below
Benchmark Benchmark Benchmark Benchmark
Market Market Market Market
Roles Roles Roles Roles
Median Median Median Median
18 9% 84 41% 22 11% 68 33%
Base Salary Findings – Salary Band Analysis
Table 6 shows the Commonwealth salary bands are significantly wider than the range of
market median salaries.
On average:
• The Commonwealth salary band minimums fall 36% and 33% below private sector and
public sector market 25th percentile salaries, respectively
• The midpoints are aligned with the private sector and public sector market median
salaries
• The salary bands maximums fall 25% and 31% above private sector and public sector
market 75th percentile salaries, respectively
Table 6
COVA Bands vs. Market Data
Private Sector Market Data Public Sector Market Data
Employees Employees
Below Max vs Below Min vs Mid vs Max vs
Min vs 25th
Mid vs 50th
Market 75th Market 25th 50th 75th
Percentile Percentile
25th Percentile 25th Percentile Percentile Percentile
Percentile Percentile
1144 -36% 0% 25% 998 -33% 5% 31%
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Base Salary Findings – Variance by Secretary
Table 7 shows the variance of benchmarked roles to market median salaries when the data is
arrayed by Commonwealth Secretary:
• Average classified employee salaries in Administration, Agriculture & Forestry,
Commerce & Trade, Finance, and Labor are 20% or more below market median
private sector salaries
• Average employee salaries in Agriculture & Forestry, Commerce & Trade, Finance,
and Labor are 20% or more below market median public sector salaries
• Average employee salaries in Public Safety & Homeland Security and Veterans &
Defense Affairs generally align to the market median private sector and public
sector salaries
Table 7
Market Data Variance
Private Public
Sector Sector
Number of
Median Base Median Base
SECRETARY NAME Benchmark
Salary Data Salary Data
Roles
Administration 6 -20% -15%
Agriculture and Forestry 4 -25% -24%
Commerce and Trade 1 -28% -22%
Education 30 -13% -10%
Executive Offices 3 -14% -13%
Finance 5 -25% -22%
Health and Human Resources 41 -12% -9%
Labor 4 -24% -22%
Natural Resources 9 -12% -10%
Public Safety & Homeland Security 22 0% 0%
Transportation 19 -18% -14%
Veterans and Defense Affairs 5 -1% 4%
Positions That Cover Multiple Secretaries 55 -13% -10%
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Base Salary Findings – Targeted Salary Increases to Market
Table 8 lists positions that received targeted salary increases in 2021, 2022 and/or 2023 and
the current variance to market median salaries. In select jobs, significant variance to market
median salaries still exits.
Table 8
Role Title Working Title General Industry Government
Market Median Industry Market
Variance Median
Variance
Agricultural Manager I Educational Urban Farm Manager -51% -48%
Agricultural Specialist II Extension Unit Technician, FASA 24% 24%
Direct Service Associate II Certified Nursing Assistant 30% 38%
Direct Service Associate II Dental Assistant -3% 3%
Direct Service Associate II Healthcare Technician Sr. -27% -27%
Direct Service Associate II Nutritionist Associate -34% -34%
Direct Service Associate II PRN Pharmacy Technician -48% -45%
Direct Service Associate III Barber/Cosmetologist 31% 31%
Direct Service Associate III Clinical Care Technician -63% -63%
Direct Service Associate III Behavior Technician -20% -13%
Direct Service Associate III Lead Psychiatric Technician 1% 1%
Direct Service Associate III Pharmacy Technician -24% -19%
Environmental Specialist I Environmental Health Onsite Tech Specialist -30% -26%
Natural Resource Manager II District Forester-Headwaters District -5% -5%
Security Officer IV Corrections Sergeant (Multiple Vacancies): 44% 44%
Sussex I and II State Prison Complex
Direct Service Associate II Dental Assistant -3% 3%
Direct Service Associate III Barber/Cosmetologist 31% 31%
Environmental Specialist II Environmental Engineer -38% -35%
Direct Service Associate II Certified Nursing Assistant 30% 38%
Agricultural Specialist V Regional Marketing Specialist - Northwest -18% -18%
Virginia Region (Charlottesville or Stephens
City) #00850
Admin and Office Spec II Postal Assistant -38% -38%
Laboratory & Research Spec I Forensic Laboratory Specialist II - Toxicology - -30% -26%
Eastern Laboratory - CF213
Laboratory and Research Tech Laboratory Technician Senior (Hourly): -18% -13%
Haynesville Correctional Center
Agricultural Specialist III Poultry Grader (Hourly/No Benefits) 15% 15%
Frederick County #W0069
Direct Service Associate II Healthcare Technician Sr. -27% -27%
Agricultural Specialist IV Plant Protection Inspector (Abingdon) -4% -4%
#00431
Direct Service Associate III Pharmacy Technician -24% -19%
14 | P a g e
Role Title Working Title General Industry Government
Market Median Industry Market
Variance Median
Variance
Direct Service Associate II Nutritionist Associate -34% -34%
Probation Manager II Chief Probation Officer (Probation Director): 37% 37%
P&P District #06/Suffolk - #P0601
Law Enforcement Officer I *Police Officer - Full time -8% -2%
Natural Resource Spec III Area Forester-Five Forks District -39% -39%
Natural Resource Spec II Park Ranger - Law Enforcement - Douthat -2% -2%
State Park
Probation Officer II Probation Supervisor 39% 39%
Security Manager I Corrections Lieutenant 33% 33%
Probation Officer I Probation Officer - (P&P District #8 South 7% 7%
Boston)
Security Officer III Corrections Officer - Beaumont Correctional -2% -2%
Center
*These positions are separate from those found in the Virginia State Police.
15 | P a g e
Salary Increase Guidelines
Historical Background
Deloitte compared the Commonwealth’s general salary increases to historical salary increase
market data since 1995. 3 Figure 2 shows that annual Commonwealth salary increases have
been irregular since the mid-1990s. This includes no general increases for Commonwealth
employees in 2001, 2002, 2008, 2009, 2014, 2018, and 2020.
Historical Commonwealth and Market Salary Increases
8%
7%
6%
5%
4%
3%
2%
1%
0%
1995 2000 2005 2010 2015 2020
Commonwealth Increases Market - General Industry Market - Government Industry
Figure 2
2024 Projections
Figure 3 shows 2024 projections for merit increase budgets in a range of industries in the
private sector. 4
Chemical/Metal
Consumer Products
Education
Energy
Financial Services
Healthcare
Insurance
Manufacturing
Pharamaceutical
Professional/Business Services
Real Estate/Construction
Retail/Wholesale
Technology/Telecommunications
Transportation
Other
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%
Figure 3
3
Source: Historical WorldatWork Salary Budget Surveys.
4
Source: Empsight Policies, Practices, and Merit Survey Report (August 2023).
16 | P a g e
Salary Increase Guidelines (cont.)
Annual Funding Recommendations
Deloitte previously recommended in the 2020 Workgroup Study that the Commonwealth
implement an annual salary increase process like the high-level example shown in Figure 4.
This process focused on the following:
1. Appropriate funds each year for annual salary increases; use market data for merit
budgets to determine the general Commonwealth merit budget.
2. Allocate budgets to each agency.
3. Instruct agencies to award increases based on performance, market position and
recruitment and retention considerations.
Figure 4
Appropriate Funds & Establish Agency Merit
Budgets
Market: 4%
Allocate Funds to Address Allocate Funds to Address
Performance and Market Adjustments Recruitment and Retention Challenges
Recommended: 2/3 of Budget Recommended: 1/3 of Budget
Consider:
Consider: • Overtime rates
• Performance ratings • The amount of retention
• Variance vs market target awards
Also use to address compression • Voluntary turnover
• Total turnover
See Appendix C for salary increase market data details.
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Salary Increase Guidelines (cont.)
Compensation Implementation Recommendations
Individual Commonwealth agencies have the ability to make salary increase decisions on an
individual employee basis. Under the proposed recommendations shown in Figure 5, agencies
will be instructed to review employee performance, compare employee pay to market, and
consider unique recruitment and retention needs to award salary increases.
Figure 5
Illustrative Example
Table 9 shows how the salary increase guidelines would work. In this example:
1. An employee is compensated below the market median base salary and met all
performance expectations.
2. The employee received the second highest performance rating.
3. The employee’s occupation has experienced recruitment and retention challenges.
1 2 3
Table 9
Performance Multiplier
Employee Salary versus Market Recruitment and Retention
Median Merit Range Challenge Merit Addition
Performance Rating Multiplier
Highest Rating 1.15x
Above 1.0% - 1.95% No 0%
2nd Highest Rating 1.05x
3rd Highest Rating 1.00x Yes 1%
Below 2%
4 Highest Rating
th
0.95x
Lowest Rating 0.85x
Proposed Salary Increase: = (2% x 1.05) + 1% = 3.1%
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Appendix A: Enacted Amendments
The 2019 Session of the General Assembly of Virginia enacted amendments to the Code of
Virginia clarifying the goals and processes of managing the compensation of the
Commonwealth’s classified workforce. 3
Be it enacted by the General Assembly of Virginia:
1. That § 2.2-1202 of the Code of Virginia is amended and reenacted as follows:
§ 2.2-1202. Review of employee compensation; biennial report on employee
recruitment and retention.
A. It is a goal of the Commonwealth to compensate its employees at a rate comparable
to the rate of compensation for employees in the private sector of the
Commonwealth in similar occupations, and consistently recruit and retain the most
suitably qualified employees. To achieve this goal, the Director of the Department (of
Human Resource Management) shall annually review (i) recruitment and retention
trends, (ii) the functions performed by each classified job role, (iii) the number of
employees and distribution of classified job roles across state agencies, and (iv) how
the salaries for each classified job role compare to salaries paid by other employers in
the Commonwealth and, as appropriate, to comparable salaries at a regional or
national level.
B. The Director of the Department shall, on or before September 1 of each odd-
numbered year, submit a report on (i) the classified job roles that should receive higher
salary increases based on identified recruitment and retention challenges,
(ii) the appropriate amount by which the salary of such classified job roles should be
increased, and (iii) cost estimates for funding any salary increases to the Governor and
the Chairmen of the House Committee on Appropriations and the Senate Committee on
Finance.
5
Source: 2019 Session of the General Assembly of Virginia: Chapter 424. (2019, March 18). Virginia’s Legislative Information
System. https://lis.virginia.gov/cgi-bin/legp604.exe?191+ful+CHAP0424&191+ful+CHAP0424
19 | P a g e
Appendix A: Enacted Amendments (cont.)
Updates to the Appropriation Act also now require DHRM to administer and perform the
following activities on an ongoing basis 4 :
Item 81
M.1. The Department of Human Resource Management shall convene a workgroup
(the “compensation workgroup”) to develop a methodology that can be used to
determine (i) the amount of funding that should be appropriated for state employee
salary increases each year and (ii) how to distribute that funding to address state
agencies' most significant workforce challenges.
2. The methodology should be data-driven and include (i) recruitment and
retention trends for each job role in the state workforce, (ii) how salaries and total
compensation for each job role compare to similar jobs at other employers,
(iii) the extent to which recruitment and retention challenges can be addressed
by salary increases, and (iv) the impact of recruitment and retention challenges
in each job role on state agency operations.
3. In developing the methodology, the workgroup shall incorporate data from
the Personnel Management Information System, the Department of Human
Resource Management's employee exit survey, and data from Occupationally Based
Data Services.
4. The workgroup shall include representatives from the Department of Human
Resource Management, the Department of Planning and Budget, House
Appropriations Committee staff, Senate Finance Committee staff, and human
resources staff from multiple state agencies.
5. The methodology developed by the workgroup shall be used to develop the
biennial report required by House Bill 2055 of the 2019 General Assembly Session.
5
Notwithstanding the provisions of House Bill 2055, the first biennial report using
this methodology shall be due by December 1, 2019
4
Source: 2019 Session of the General Assembly of Virginia: Budget Bill HB1700 (Chapter 854). (n.d.). Virginia’s Legislative
Information System. https://budget.lis.virginia.gov/item/2019/1/HB1700/Chapter/1/81/
5
Source: 2019 Session of the General Assembly of Virginia: Chapter 424. (2019, March 18). Virginia’s Legislative Information
System. https://lis.virginia.gov/cgi-bin/legp604.exe?191+ful+CHAP0424&191+ful+CHAP0424
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Appendix B: Market Review Methodology
• Deloitte identified and confirmed market matches for 204 occupations with DHRM
leadership using published compensation surveys and publicly available information on
the Commonwealth of Virginia's website that documents the following:
− Job content,
− Overall level of responsibility,
− Supervisory responsibilities,
− Educational requirements, and
− Years of experience.
• The Commonwealth’s employee headcount and salary data are effective as of
October 27, 2023,
• The survey data were aged from the effective date of each to October 1, 2023, at an
annual rate of 4% for the public sector and 4% for the private sector, 6
• With the exclusion of the U.S. Bureau of Labor Statistics (“BLS”) data, the market data
reflect similarly sized organizations based on the total FY23 annual operating budget of
the Commonwealth 7
• Salary Surveys used include:
− Economic Research Institute (ERI) Salary Assessor
− Empsight International, “The Works” Survey
− Pay Scale Report
− U.S. Bureau of Labor Statistics Survey
− Mercer Surveys (Healthcare System Executives; Healthcare Individual Contributors
Report; Healthcare Individual Contributors Report; Physician Practices/Clinics Report;
Supervisory and Management Report; Executive Report; Finance, Accounting, and
Legal Report; Information Technology Report; and Sales, Marketing, and
Communications Report)
− Willis Towers Watson Surveys (Accounting & Finance Compensation Survey;
Engineering, Design, and Technical Specialty Compensation Survey; Health Care
Clinical and Professional Survey; Healthcare Executive and Management; Information
Technology Compensation; and Marketing & Communication Compensation Survey)
6
Source: WorldatWork 2023-2024 Salary Budget Survey.
7
The U.S. BLS data represent a collection of federal, state, and local government organizations of all sizes; the BLS is not scoped
based on operating budget.
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Appendix C: Salary Increase Market Data
The following shows current market practice information on annual salary increases and
salary structure adjustment practices in the public and private sectors to help DHRM
develop a salary increase budget for classified positions.
The data represent calendar year 2024 salary increase projections for the government/
public sector (Table 5) and the general industry/private sector (Table 6). The data are
specific to salary structure adjustments, cost of living adjustments (“COLA”), merit
increases, and total increases. 8
Table 5
Public Sector Survey Source
Increase Type WorldatWork 9 PayScale 10 Empsight 11 12
Salary Structure Adjustments N.R. 1.8% N.R.
General Increases/COLA N.R. 2.3% N.R.
Merit Increases N.R. 2.6% N.R.
Total Increases 13 N.R. 4.0% N.R.
Table 6
Private Sector Survey Source
Increase Type WorldatWork 11 PayScale 12 Empsight 13 14
Salary Structure Adjustments 3.0% 2.3% 2.9%
General Increases/COLA 3.0% 1.3% N.R.
Merit Increases 3.5% 3.2% 3.7%
Total Increases 15 3.8% 3.8% 4.0%
8
The data have not been scoped based on number of organization employees or organization annual budget/revenue. Details
identifying the specific entities and organizations on which the data are based are not reported in the market surveys.
9
Market Data Source: WorldatWork’s 2023-2024 Salary Budget Survey. WorldatWork includes Public Administration data. All data
reflect medians.
10
Market Data Source: Pay Scale 2023-2024 Salary Budget Survey. All data reflect medians and exempt employees. The survey
reports data based on employee-type level (i.e. Exempt, Non-exempt); it does not present data on an overall basis.
11
Market Data Source: Empsight Policies, Practices, and Merit Survey Report (August 2023). All data reflect medians.
12
Many of the participants in Empsight’s survey are Fortune 500 companies; 80% have annual revenues greater than $3 billion.
13
Total Increases: The sum of increases granted over the course of the year.
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