WILLMAR - According to a compensation study completed by Springsted, the city of Willmar underpays its employees by a significant margin when compared with similar-sized cities and regional centers.
"Based on this survey, we would not be considered competitive," Willmar Human Resources Director Samantha Beckman said.
The final report of the compensation study was presented Monday to the Willmar City Council's Labor Committee. The city had signed a contract with Springsted to complete the study in fall 2017.
"There is a lot of information to digest here," Beckman said.
The survey report, based on the comparison of 28 different positions, said the average minimum wages at the city are 19.09 percent below the market rate, midpoint wages are 15.08 percent below market and the maximum wages are 12.53 percent below market.
"We are seeing a lot of red," Beckman said.
The Springsted study considers a city competitive if its wages are within 5 percent of the market average. Of the 28 Willmar positions compared in the study, only two have minimum salaries within 5 percent, the report said.
The wages reported in the survey do not include the benefits of the city's contributions to the employee's family health insurance or the health savings account. Those benefits would increase the overall compensation the city offers its employees.
Beckman said when people are looking for a job, they first take a look at the wage. If that is low, those potential employees might just move on.
"They are going to look at what you pay, and if it is not anything they think is competitive, they are not going to dig into our benefits and see if it is something they want to apply for," Beckman said. "They are going to write the job off. Recruiting-wise, salary is going to have a bigger difference."
Springsted provided the city with three possible options for a new compensation plan, with the wage ranges changing depending on whether health insurance benefits are being counted as part of the wage package.
"If we are not competitive, we obviously need to change that," Councilor Shawn Mueske said. "We need to keep making steps toward equalization."
The City Council at the July 29 retreat will take a deeper look at the survey and specifically those positions which are represented by a union.
"We would need to dig into the financial ramifications," Beckman said. "It is tricky to know what to do now."
Prior to the retreat, committee members want the full council to take a look at the department head wages. The department heads are not unionized, and there are concerns about the compensation of those positions.
"We are in a vulnerable spot with them," Councilor Kathy Schwantes said.
The committee made no recommendations regarding the survey or next steps, but members plan to continue discussing the issues brought up in the Springsted survey and staff will gather more information to help in any decision-making.
"I think it is good we are talking about it now. We are showing concern for employees," Councilor Fernando Alvarado said. "We want to be the place of choice."