The Town of Carefree recently commissioned a study on the staffing and compensation levels of the Town government. The findings were presented in the February Carefree Town Council meeting.
Planning & Zoning Commissioner Sharon Smith participated in this study and has written a summary for our readers.
Dr. Smith is a labor economist whose early career included positions at AT&T and the Federal Reserve Bank of New York. A second career as an academic culminated with 12 years as President of the University of Pittsburgh at Greensburg, from which she retired in 2019. Relevant publications include Pay Differentials Between Federal Government and Private Sector Workers (Sage Publications) and Equal Pay in the Public Sector: Fact or Fantasy (Princeton University).
Below is Dr. Smith’s letter, published in the public interest.
Carefree Compensation and Classification Study
At the February 6, 2024 meeting of the Carefree Town Council, Matthew Weatherly, President of Public Sector Personnel Consultants (PSPC), presented the results of a compensation and classification study commissioned by the town. The key findings were that the Town is not over-staffed, its base pay ranges are competitive for most of the jobs (44% of positions falling below the market salary midpoint and 56% within the market) and its benefit package is in line with market averages. PSPC recommended that Carefree budget for salary increases through general increases, cost of living adjustments, and/or employee performance. The Carefree Town Council unanimously approved a resolution to accept this study and make it a public record.
The PSPC study was made in response to questions from town residents concerning staffing levels and compensation. As a matter of due diligence, it was determined that an analysis independent of town staff would yield the most trusted result. A request for qualifications (RFQ) was issued and three local human resource consulting firms responded. A committee comprised of Mayor John Crane, Town Councilmember Michael Johnson, and me, Carefree citizen Sharon P. Smith reviewed the responses, interviewed the firms, and selected PSPC as the best fit for the study.
The use of surveys of compensation (wages and benefits) to guide pay setting (especially through collective bargaining) has long been a practice in both public and private sectors. Indeed, it dates back to1862 for blue-collar workers and to 1962 for white-collar workers in the Federal government. The guiding principle here is “comparability,” that workers should be paid similarly based on their skills in relation to the requirements of each job regardless of their sector of employment. Applying this principle to a town like Carefree helps it secure skilled staff and assures staff that their pay is similar to that of other employers in the labor market area. If, instead, pay rates were too low, the town would experience costly turnover and town services would suffer. If pay rates were too high, the excess cost could put an unnecessary burden on the town budget.
The design of a compensation survey is both an art and a science. Carefree is a small town but the staff skills are also in demand in larger government entities and in the private sector. Therefore, it is essential to understand the market where Carefree recruits its staff.
The town seeks its employees in the local labor market, not communities 100 or more miles away. This fact informed the survey universe for the compensation study: a set of public employers in the labor market area – Cave Creek, El Mirage, Fountain Hills, Litchfield Park, Maricopa County, Paradise Valley, Phoenix, Scottsdale, and Tempe – and an existing data set for private employers in the Phoenix Metro Area.
Staff were interviewed to verify job descriptions. Comparisons were then made for the mid-points of salary ranges for matching job classifications. (In compensation analysis, the mid-point of a salary range is seen as the market value for that job and the goal is to pay employees close to that median. The exact position in the range could then reflect tenure on the job and/or outstanding performance.)
The PSPC study confirmed that the town is not over-staffed: with about 4 civilian staff employees per 1,000 residents in contrast to an average of 5.5 staff per 1,000 residents among the smaller units in the survey. This means any individual Carefree staff member may have more complex duties than a comparable staff member in one of the other small towns and will certainly have less “back-up” support.
The overall conclusions answered the questions that were raised: staffing levels are appropriate, and compensation is consistent with market. The video link,
https://vimeo.com/911336590?share=copy, provides the specialist’s presentation and offers essential insights for decision-making regarding workforce efficiency and fiscal responsibility.
Nonetheless, future compensation levels need to be carefully monitored to assure that they do not fall behind comparable jobs in the local labor market.
Sharon P. Smith, PhD
Carefree Resident
Carefree Unity 