ORDER-2023-29 : An Appropriation in the amount of $167,310 (One Hundred Sixty-Seven thousand, three hundred and ten dollars) to fund the HRS compensation study. The requested appropriation is from the following accounts $159,784 from the Contract Stabilization fund (84042-590000), $3,763 from Sewer, Reserve for Retained Earnings (84152-590000) and $3,763 from Water, Reserve for Retained Earnings (84162-590000) to various salary and wage lines as set forth herein.

Transcript (~24 min @ 47:44)

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▶ 47:39 Speaker 3: grapy. Yes counselor. Jamal Dean. Yes counselor Stewart. Yes councilor Williams. Yes president. Snella yes and share your

▶ 47:49 Jen Grigoraitis: greatest. Yeah, that's nine. Yes nine. Yes, so that carries, and we'll be recommended to the full Council for passage. Thank you all for being here this evening. Thank you very much.

▶ 47:57 Jen Grigoraitis: So next we have order 2023-29 and appropriation in the amount of 167,310 to fund the HRS compensation study. The requested appropriation is from the following accounts $159,000 784 from the contract stabilization fund number 84042-590,000 3,763 from sewer reserve for retained earnings account number 84152-590,000 and 3,763 from water reserved for retained earnings. Account number 84162-590,000 to various salary in wage lines a set forth here in and this is offered by mayor Broder and I believe we have there's Lotsa and misfleischman here if you can introduce yourself. Thank you for being here.

▶ 48:53 Speaker 4: Good morning, Matt and good evening Madam chair and members of the kitty committee and Margot Fleischmann here on behalf of mayo Broder along with polyatta and our consultant team from HRS who Polly will introduce in just a moment. We're here to explain to you the results of the compensation and classification study that was done over the course of the past year and again to make that funding request to fund the study results. So with that I'll turn it over to poly and I'm going to move over to advance the slides. Thank you. Good evening. Everyone good to see you. So I will introduce here. We have our Consultants that conducted the study over the past year. We have Sandy stretching ski with HRS Human Resource Services. Sandy's has 35 plus years of Consulting experience. She has worked with hundreds of municipalities in Massachusetts in New Hampshire worked on over thousand projects and she's well known expert in compensation classification. She's written books ebooks and she's member of the international sitting Council management association in she does continues to do training and teaching National webinars on HR and recruitment retention performance appraisals. Then we have bus strap chain Ski Bus has served as the CEO of a large municipality. He also has over 40 years of experience working with local government. He has long history institutional knowledge. He's been the town manager of Andover for 25 years and serves as the president of mass Municipal Association and mass Municipal Management Association. Tony Therese is not here today. But he's also a member of the Consulting team. Tony has over 40 years experience in Municipal Finance. He has been a Director of Finance for Andover for 32 years. And last but not least is Barbara wooden she is she has served the assistant. Human resource officer for the entire Commonwealth and she has extensive experience in human resources and compensation management. So why we here today? Why do we need the company class study. I came to you about a year and a half ago requesting that you funds the hiring of Consulting team to conduct the study. It's best practices standardized based practice from municipalities to maintain and update their classification compensation system in a sexually recommended it is done every three to five years. We're here today because the last time such study was conducted was over 30 years ago. And as we know 30 years ago lots have has happened. We have you know departments new positions emerging technology new expectations from employees. We have changing labor market the great transition and we're also experiencing changes in the economy over the past year and two, so that's why we're here because our existing plan is Obsolete and it hasn't been updated in a long time at this point. It doesn't serve it doesn't serve the city of Melrose the In the study the report that was presented by HRS at one point in the report there describing the city of Melrose as Progressive and forward-thinking Community with complex and creative organization. And we want to maintain that image for the sake of being able to retain our institutional knowledge in attract and recruit diverse talented Workforce. So that's why we need the study. There was a year and a half ago. There's even more of a needs today and I'm hoping that you will help approve the funding so that we can implement the proposed compensation classification system tonight. So essentially we need to invest in the city of Melrose payroll compensation classification infrastructure. Just like we invest in our schools in our buildings in our streets. The non-union investing in this infrastructures investing in our Workforce. So our non-union employees. They don't have an established process like the union employees who get every three years the opportunity to negotiate better terms and updated salaries. So it's our responsibility as an employer.

▶ 53:50 Speaker 4: Oh, okay is an employer to update and maintain our compensation system? I'm sure you have seen all the openings. We've had over the past few years. A lot of Municipal Employees over the the state are transitioning their retiring and the pipeline is not full. Unfortunately. There's some very specialized positions that require very unique skillset that are unique to municipal government department has their difficult to recruit and retain and with all the changing landscape. We need to continue to be able to compete with other municipalities. in the labor market

▶ 54:40 Speaker 4: So ensure that the goal of the compensation classification study was to develop support maintain fair and Equitable classification compensation system to update the job descriptions for All City of Melrose non union positions and the positions were evaluated using common set of criteria of systematic and in systematic and objective Manner and as a result, we the consultant proposed a plan that supports pay equity in hierarchy and it's based on skill and job requirements. So just to briefly go over the timeline about year and a half ago the city council voted to authorize appropriation to hire Hrs. In HRS began work reviewed analyzed positions conducted external market analysis. And met with our department heads interviewed every single employee that participated in the study and presented the draft compensation classification plan. First two department heads to get feedback and then to all employees as well. After the draft was presented HRS also trained City my department trained me and the Workforce Development committed to administer the plane and to be able to evaluate use the Tuesday provided to us to evaluate in classify positions going forward. So this is something we can use for the long run because it's really well. It's a tested and balance formalized methodology that they're using. Over the summer we gave opportunity for employees who felt like their positions might have been misclassified to come forward and appeal. We created an appeal process and gave opportunity for them to present their appeal the Workforce Development Committee met in again using the training that HRS provided to us the very valuable training use the objective system to assess their classification. The classification of their positions and I just want to stress. This is all about positions. It's not about the individual employee in the position. That's the company class study. So the appeal process is completed plan was finalized and here we are today. So I would like to actually bring Sandy and Buzz to present what they saw in our current system that's lacking and what they're proposing how to meet the current future needs within your system. Okay. Thank you.

▶ 57:52 Speaker 4: Hello, good evening. Thank you for inviting us. I'm Sandy. And this is Buzz. And we're from Human Resources Services. Thank you president of the council council members and chair for having us here this evening. I I first would like to say before I get into some of our findings that we we felt the team that the council had very good insight and foresight to appropriate the money to do such a study and it was very needed and because of all of you we feel that this the city has something now that they can go forward with and it's more than just compensation. It's actually a whole system and a tool, you know that they can use so The system that you had right now is is rather a static and it's not updated regularly and it had a number of tears and a variety of schedules and a hundred plus grades. So there were a lot of inequity issues with it. And this happens. Sometimes it doesn't mean that anything was mismanaged. It just means over years things get disjointed if you will, so it was a very very long time ago that you updated that you did a study. So it needed to be updated. They were inconsistencies throughout with regard to the percentages the movement from minimum to maximum the percentages in the ranges. And a lot of the positions were not on the salary schedule. They were only in positions were only receiving a cola increase. So there were a lot of issues the updated Compensation Plan first and foremost is in compliance with the mass Massachusetts employment Pay Act, which was enacted in 2018. so that really needed for that reason, especially you needed to have all of this updated and the this reflects now not only the meatball law but also the marketplace the internal job values ensuring that employees paid comparably for comparable work and Also, we are recommending a salary schedule with with you know, there are. I think about 23 grades but only 16 of them are being used and there's two percent between each step. So we've we standardized everything and we we have a system where we look at the external market and we all which helps us to set the parameters of your pay structure. And then we also have a system where we look at the internal equity in sharing that this comparable work equity in the system. So it allows for the compensation plan to to be used equitably by all departments. So we don't have people pulling numbers out of hats and and there is a balance and so going on to the next slide. Some of the other some of the pay decisions were made in a vacuum. So this provides more fair and Equitable approach to pay in decisions and it reduces any subjectivity that that you would have also by having an outside consultant. We don't know anybody here. We didn't we don't know the politics. We don't we're not related to anybody without we come in as a third party to do an independent study. And that's what a lot of cities in towns have us do and and that's really in keeping with best practices. You always want to have a third party to do the benchmarking of compensation. So I mentioned the meepa and the various tears the various tears that you had made an inheritedly inequitable based on the new law. And also there was a formal flsa review of all the jobs to ensure compliance with exempt and non-exempt and we have an occupational assessor system that we use to actually classify all the flsa analysis and ensures the proper classification of exempt and non-exempt and and like I like to say is you know, the city was not doing anything wrong. It just was another check to make sure because if you don't do the job analysis, and if you don't review jobs over a long period of time sometimes things will change. So all the job descriptions were updated as well. And they will formalized and one of the nice things we did with the job descriptions is we all so ensured that it had the flsa compliance. It also had language has language in there now for Equity inclusion diversity which is which was sort of lacking in your your job descriptions and and really should be a part of your recruitment effort. Anyway, which we sure there are so there are risk, if the plan is not implemented. It's it's the current plan is not it's not compliant. It's not it's even not fair is a very mild way of saying it but it puts you at risk for inequitable pay based on equal equal work in the value of the jobs. It puts you at some legal exposure and it will be hard to recruit at your current. wages given what the market is right now, just just to give you an idea Sherm came out with a statistic that average increases have gone up about 4.2 percent, you know overall, however Inflation is going to have 8.7% or something like that. So so it's it's really really hard to retain employees. It's hard to you know, people are always looking for a higher pay and there are a lot of jobs and a lot of opportunities for people in the market. So so you have that going on too. So we have on the one hand the compliance issue. Then you also have your strategic compensation planning for keeping and retaining hiring retaining your employees and providing a fair fear and Equitable wages. And we also support a hybrid performance-based appraisal system that could tie into it to you know to ensure future raises are tied to to Performance and this could also improve morale. So I just wanted to you know, and by saying that this was a very very comprehensive study and a lot of effort went in not only from our consultant team but also by the employees and the department heads and the officials and and human resources and and it was it's sort of everybody had input into it and it involved a thorough job analysis interviews with employees. Selecting those comparable organizations that we Benchmark against and collecting all the data. We also added some benefits information that we surveyed and we went through the rating of all the jobs. The rating system is part of our tool that we use for these studies and we rate on 14 different factors such as supervision complexity accountability in a variety of other ones education experience physical requirements of the job work environment and so forth is 14 of them and all the jobs are rated on those and that together with that's the internal analysis that compare in also with the external Market we can come up with our total comp and class system. So it is more than just an updated pay plan. You're really getting a whole system with it. So, I don't know Buzz if you wanted to add anything. I just

▶ 1:07:15 Speaker 5: want to just emphasize that as a survey was done. I forget how many municipalities were looked at 10 10. All right, I wasn't sure if it's 10 or 12 and data was pulled out from all of those municipalities that have similar or comparable positions. So we did look out into the entire universe of comparable municipalities for you folks to see what the salary ranges were. For again the comparable employees and at the same time Sandy said I just want to reiterate there were individual love interviews done the employees filled out a form so that we could gather information about them and about their position their experience their education the licenses required the supervision that they provided and then the supervision that was required to be provided to them. So we had a really good look at your non-union personnel. From which then to base the survey on and to collect the data. For the report and including the updated job descriptions. I can't tell you how important it is to have updated job descriptions for you in your own business. As you may know, you know, things change all the time the environment changes continuously with employees with the labor market with the workforce. So it's imperative to have updated job descriptions and part of the tool that we're leaving. The municipality with is the ability to have the job descriptions updated annually, you know by Paulina and her staff going forward.

▶ 1:09:05 Speaker 4: other side sure that all the knowledgeability and skills were looked at the education training experience the market data and the job duties so You know now going forward you have to you know, just maintain it and I guess a I don't know if you have anything else dad at this juncture. And we'll take questions now or at the end we have just a few more slides. Yeah, so the final result of the compensation study is adjustment to 58 positions. Not every adjustment exceeds the existing Department budget. And the reason for that is that they send the described we have certain positions placed on a plan that varies the percent increase between steps there from one point 25 3.5% Then sleeping part. It's a position is within the range and they were scheduled to receive 3.5% increase this fiscal year. the adjustment from the new adjustment is lower than the 3.5% that they were scheduled to increase this fiscal year. So therefore that was absorbed by the budget. So in other words for certain positions, if you refer to the large Excel spreadsheet that we had shared with you, you will see negative percent adjustment that that means that for this position the salary growth may have been slowed down for this year in order to catch up. And then some salaries are paid through other sources through regionalized and grim-funded including virgin wise and grandfounded positions are put and some other sources. So not everything is absorbed for this funding order.

▶ 1:11:26 Speaker 4: So Patrick you want to bring

▶ 1:11:29 Jen Grigoraitis: that before we start we have to gavelin to health education and Welfare. So we're going to need to take a short recess so that we can stay in compliance with open meeting laws. So