We are a decade out from the Great Recession and consumer confidence has not only reached its highest level since 2010, it’s approaching the record-setting levels of 2000. This suggests continued, solid economic growth for the rest of 2018, according to The Confidence Board, the nonprofit economic research association owned by Nielson Holdings. What’s more, the nation’s unemployment rate recently dipped below 4%, which hasn’t happened since 2000.
At the state level, tax revenue growth has picked up after two years of weakness, with the vast majority of states meeting or exceeding revenue expectations, according to the National Association of State Budget Officers. Increased revenues are allowing states flexibility to spend more, though there is still uncertainty over how pension contributions, health care, and 2017 tax reform legislation (the Tax Cuts and Jobs Act) will impact future growth.
Municipal budgets, on the other hand, are not faring as well. Results from the National League of Cities’ latest City Fiscal Conditions report indicate local budgets—which have yet to fully recover from the recession—are being influenced by slowing housing markets, stagnating wages, rising gas and oil prices, decreases in state and federal aid, and tax reform. Expenditures are outpacing revenue growth, and this trend is expected to continue. Despite these challenges, 88% of cities have increased spending on employee wages.
To determine how state and local budgetary issues are impacting public salaries, we turned to our readers. More than 200 men and women completed our annual salary-and-benefits survey in August, reporting the biggest percentage of salary increases since we began asking about raises in 2011:
· Eight out of every 10 respondents received a pay raise in 2017
· 20% say their wages stayed the same (a 5% drop from the previous year)
· Only one survey respondent reported a pay cut
Based on the past six years of results, more public works employees are receiving raises with each year we move further away from the recession (see the pay raise comparison chart). Meanwhile, the percentages reporting salary freezes and pay cuts have significantly decreased—by 45% and more than 11%, respectively – since 2011.
Recruiting Next-Gen Employees
It’s no secret the government workforce is aging. Of the 204 public works professionals who took our 2018 salary-and-benefit survey:
· 27% are 55 years to 60 years old and 18% are older than 60
· 16% are 40 and younger
· Only two survey-takers are 25 or younger.
What’s most concerning is nearly half of respondents (45%) said their departments/employers are doing “nothing” to recruit new employees. As a county-level planning/zoning/inspection/permitting technician earning $50,000 states, “Nada, zip, zero. Stuck in the Stone Age with heads firmly planted in the sand.”
Recruitment Strategies
Government has traditionally offered generous benefits packages to make up for noncompetitive salaries (68% of survey respondents say their pay is “lower” or “much lower” than those in private industry). However, public agencies struggling to balance budgets can no longer offer benefits like premium-free health insurance.
Meanwhile, state and local agencies are struggling to hire engineers and those in the skilled trades, according to the Center for State & Local Government Excellence (SLGE). Last year, we shared advice from SLGE on how to attract new talent, which includes:
- Building a brand that tells the great story of public service.
- Revamping old policies and practices to offer work-life balance: flexible schedules, telecommuting, less-rigid job descriptions/responsibilities/compensation bands.
- Preparing for workforce transitions and grooming future employees: succession planning, mentorships, job shadowing, internships.
- Leveraging technology, data, and automation to give employees tools they need to be highly productive and successful.
This year, we asked public works professionals what their employers are doing to recruit new employees. While nearly a quarter (24%) said they’re investing in technology, data, and automation tools to entice younger workers and 22% are offering internships, only small percentages listed additional efforts such as:
- Offering flexible schedules, telecommuting, work-life balance (14%)
- Providing less rigid job descriptions, responsibilities, compensation bands (9%)
- Rebranding the organization’s image to appeal to younger employees (6%).
Eleven percent don’t know what’s being done to bring in their successors.
The typical respondent:· Is a 55- to 60-year-old male
· Is a manager/supervisor working in a public works department
· Works for a Midwestern or Southeastern municipality, with a population of more than 1 million
· Has a bachelor's degree
· Supervises 1 to 5 employees
· Has more than 20 years of experience.
Less than 1% of our 2018 Salary & Benefits Survey respondents don’t have a degree (including a high school diploma or GED) and 24% don’t hold any licenses. Participants who selected “other” degrees and licenses listed professional land surveyor, professional architect/landscape architect, accounting and other licenses as well as trade school and college courses completed without a degree. Special training and certifications include DOT inspector, facility manager, chemical application, local government purchasing officer, fire protection, and those given by the National Institute for Certification in Engineering Technologies.
AVERAGE SALARY
Administrative (support personnel) - $33,000
Assistant/deputy director - $86,000
Department head - $80,000
Developer/planner - $68,000
Director of public works - $122,000
Director, other - $90,000
Engineer - $93,000
Foreman - $70,000
Inspector - $57,000
Manager/supervisor - $81,000
Operator - $38,000
Specialist - $68,000
Superintendent - $73,000
Technician - $59,000
By Department/Practice Area
Building maintenance - $86,000
Engineering - $89,000
Environment/pollution control/conservation - $93,000
Fleet services $75,000
GIS/surveying/mapping - $66,000
Grounds, parks (urban forestry) /roadside maintenance - $55,000
Highways, streets, roads, bridges, traffic control/lighting, transportation, etc. - $84,000
Planning/zoning/inspection/permitting - $70,000
Public works, general - $90,000
Solid waste/recycling - $98,000
Wastewater/stormwater - $81,000
Water - $77,000
Dollar amounts rounded to nearest thousand. Source: Public Works
How Competitive is Your Pay?
Wages Up, but Not Enough
As in the past, many respondents pointed out their salary boost is failing to reach their wallets. The two most commonly cited reasons are increased employee contributions and pay-grade salary caps, which prevent government employees from receiving pay increases beyond cost-of-living adjustments (COLA; see sidebar). While 80% of respondents did receive a raise, 70% saw only a 1% to 3% increase. Meanwhile, two-thirds said their health care premiums went up and more than half (54%) are paying more in out-of-pocket costs (copays, deductibles, etc.).
“Health care costs need to be controlled,” says a county engineer in the Midwest earning $94,000 who, like many respondents, received a 1% to 3% raise in 2017 while also having to pay more in health care premiums and out-of-pocket costs.
Despite concerns over the growing cost of health care and other defined benefits, 73% of respondents are somewhat to very satisfied with their benefits packages (down from 83% last year). Of those surveyed, 12% are dissatisfied, with another 14% remaining neutral (neither satisfied nor dissatisfied).
Additionally, more than half (56%) say their benefits are more competitive than those in private industry. (For more on public- and private-sector benefits packages, see “What Your Compensation Costs Your Employer” table.)
The majority of respondents’ benefits typically include paid vacation days (96%), health insurance/benefits (93%), paid holidays (93%), sick leave (90%), dental insurance (86%), and a pension plan (81%). Nearly three-quarters also receive life insurance (74%) and a 401(k), 403(b), 457(k) or other savings plan (70%).
“Pension is awesome, something you realize more and more over time … as long as they keep it viable!” says a Midwestern manager/supervisor working in environment/pollution control/conservation who earned $104,000 last year.
“It’s the reason I am able to retire with a living wage,” says a wastewater/stormwater specialist in the Mountain West who makes $58,000.
Nearly two-thirds of respondents receive vision insurance (65%), paid training (CEUs/PDHs, other; 64%), and tax-free flexible spending accounts for medical/dependent care (64%). More than half receive disability leave (60%), accidental death and dismemberment insurance (59%), paid professional registration/association memberships (57%), and a cell phone or phone allowance (54%). More than one-third are offered tuition reimbursement (48%) and comp time (43%). Three out of every 10 respondents receive retirement health insurance.
A small but lucky 6% do not pay health care premiums, as those expenses are covered either by their employer or their union.
Percentages rounded to nearest whole number. Source: Public Works
This is a sampling of the biggest changes since 2008. Oddly, a benefit that appeals most to next-generation workers has experienced the largest decrease: flexible scheduling/work hours or telecommuting. Source: Public Works
HOW COMPETITIVE ARE YOUR BENEFITS?
Percentages rounded to nearest whole number. Source: Public Works
In For the Long Haul (and Pension)
Respondents are more likely to retire from government service than jump to higher-paying jobs in the private sector. One-quarter have served in their current position for more than 20 years, and 46% have worked in public works for more than 20 years. An additional 12% is approaching 20 years of service.
“Salaries are extremely low, but the defined-benefit pension plan gets a grip on you and it’s hard to move on,” says a Southeast manager/supervisor working in planning/zoning/inspection/permitting with 11 years to 15 years’ service and a $42,000 annual salary.
Whether pensions are enough to attract a new generation of public works professionals remains uncertain. As a municipal director of engineering in the Southeast earning $81,000 says, “Employee [contribution] has increased from 6.7% when I started in 1995 to 9%, with another increase scheduled. Entry-level salary ranges are too low to attract qualified candidates in the current market, and mandatory participation in the state pension plan makes that a harder sell.”
With retirement looming for many Public Works readers, the question remains: Who will replace them when they are gone?
