Study illustrates need for compensation commitment

COLUMBUS -- University administrators today (4/5) presented a comprehensive compensation benchmarking study to the Board of Trustees that strongly reinforces the need to continue a commitment to a multi-year compensation policy as a top priority consistent with the Academic Plan. Fiscal year 2003 salary recommendations will be presented at the May board meeting.

The study compared Ohio State’s average salaries with those of benchmark institutions for each of the past five years, examined how Ohio State invests its salary dollars in terms of gender and ethnicity, compared the cost of benefits at Ohio State with other institutions, and determined the market outlook for fiscal year 2003 raises.

The analysis was presented by Edward J. Ray, executive vice president and provost; Barbara Snyder, vice provost for academic policy and human resources; Larry M. Lewellen, associate vice president for human resources; and J Stephen Henderson, director of compensation. The data were collected and organized by the Office of Human Resources' Management Information Analysis and Reporting.

“On average, faculty and staff salaries are significantly behind market,” Lewellen said. “We found that faculty salaries are behind market for 14 of the 16 colleges for which we have data, and preliminary data suggest that staff salaries are behind market for all categories.”

Ohio State ranks ninth out of its 10 public benchmark institutions for budget allocations for faculty salary increases during the past five years. The average five-year total is 23.2 percent; Ohio State’s total increases add up to 15.8 percent.

During 2001-02, Ohio State continued to slip below the benchmark average for faculty salaries. The current Ohio State faculty salary average of $74,840 is 5.5 percent below the average benchmark salary of $79,180. In 2000-01, Ohio State’s average of $73,930 was 2.9 percent below the benchmark average of $76,160. In 1999-2000, Ohio State’s average salary was $70,350, 2.5 percent below the benchmark average of $72,130.

There also are differences by faculty rank. Ohio State’s full professors are 4.8 percent below the benchmark average, associate professors are 6.5 percent below and assistant professors 6 percent below.

Snyder presented a college-by-college analysis of how Ohio State average faculty salaries compare to their counterparts in public benchmark institutions, noting that 14 out of the 16 colleges for which data were available are below the benchmark average. Social and Behavioral Sciences rank 2 percent above average, while the majority of colleges rank from 3 to 5 percent below. Dentistry is 15 percent, Education is 10 percent and Law is 9 percent below the benchmark average, and Social Work is 18 percent below.

Because Ohio State is conducting a comprehensive staff benchmarking process, updated data for staff salary comparisons is not yet available, Henderson said.

“Staff were below market with some groups by as much as 8 percent last year, and our preliminary data suggest that they will be even further behind market this year. This is not only due to low raises last year, but we believe it is also because we now have market information on an increased number of positions,” Henderson said.

The report included a study of total investments – including base salary increases, premium credits and cash bonuses – for fiscal year 2001-02. In terms of gender, the study found that men and women received the same percent increase within the faculty and Classified Civil Service (CCS) employee groups, respectively. Female administrative and professional employees received, on average, a 1.7 percent increase, while men received a 1.3 percent increase.

Minority faculty received, on average, a 1.2 percent increase, while white faculty received 1.1 percent. Administrative and professional minority employees received 1.7 percent; white administrative and professional employees received 1.5 percent. There was a 2.3 percent increase for minority CCS staff and a 2.1 percent increase for white CCS staff.

The report also included a cost comparison for benefits among 20 higher education institutions. The average estimated premium cost for 2003 is $3,681; Ohio State’s cost is projected to be $3,292.

“We are not happy with the rising cost of healthcare we have experienced this year and projected for next year,” Lewellen said. “However, this information shows that we are not alone and that the overall cost of Ohio State healthcare plans compares favorably with similar institutions.”

The presentation also included a summary of the market outlook for salaries during fiscal year 2002-03. Benchmark institutions are projecting raises in the range of 3 percent to 5 percent, and Ohio public institutions in the range of 3.2 percent to 3.5 percent. Local and national projections from available consultant surveys were also presented, on a local or national basis.

Administrators also reported on institutional support for graduate students. On average, Ohio State provides $10,809 of financial and medical benefit support for resident students; the benchmark and public CIC (Committee on Institutional Cooperation) institutions provide an average of $12,360. For non-resident students, the university provides an average of $10,809 of support; the benchmark and public CIC institutions proved an average of $12,042 of support.

“Our financial support for graduate associates is among the lowest for our benchmarks, particularly for health care sponsorship,” Henderson said.

Ray said the study illustrates the need for the university to continue its commitment to the multi-year compensation initiative that the university has adopted as a top priority consistent with the Academic Plan. “We intend to recommend a compensation package next month that will begin to reverse the negative trend in salary competitiveness for faculty, staff and graduate associates and will require a continuing commitment to above-market compensation increases for a number of years.”