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Kenton County Fiscal Court hears results of JER HR Group compensation study

By Patricia A. Scheyer
NKyTribune reporter

Blair Johanson from JER HR Group gave a report this week at the Kenton County Fiscal Court meeting on the compensation study the company compiled for the county.

Two pieces of legislation related to the compensation study immediately followed the presentation. A resolution approving and adopting the master wage scale and subscales passed unanimously, as did an Executive Order accepting the compensation study salary adjustments for employees of the Kenton County Fiscal court.

Blair Johanson from JER HR group, gives a presentation to the Kenton County Fiscal Court (Photo by Patricia Schemer)

“Our organization has just celebrated 50 years,” Johanson stated. “We really focused a lot of our effort over the last several years, on what we call classification and compensation studies, and the process of evaluating compensation plans both internally and externally. We developed, back in 1985, what we call the job evaluation process; its a fifteen-factor way to evaluate positions and determine the value of those positions based on those 15 factors.”

The objectives of the study were, first of all, to maintain a compensation system that would provide fair and equitable salaries based on internal job requirements and competitive external pay with comparable positions within the regional area. Secondly, the county’s goal is to offer competitive benefit plans to enhance employee total rewards packages. A final objective is to maintain a compensation plan that is aligned with and supports the goals of the county.

In addition, the company wanted to balance the desire to competitively pay employees with the financial resources of the county, and be fiscally responsible, as well as maintain a compensation management system that is flexible to meet the changing needs of the county. This is in addition to employee talent attraction and retention.

The study compared rates not only with other counties in the area but also with cities in the area. The counties were Boone, Butler, Campbell, Hamilton, and Fayette, and the cities in the comparison were Covington, Cincinnati, Edgewood, Erlanger, and Independence.

Johanson said that when the study was complete, they presented the draft and final reports, with recommended changes to Kenton County’s existing payment plans, along with an implementation strategy.

Chart showing the Phase II Market Pay Study Variants (Photo by Patricia Scheyer)

The study recommendations included adopting the 2023 proposed pay grade and range structure, funding a market pay study and employee retention pay increase, increasing pay for the employees below pay grade minimums, and regarding positions based on internal job evaluation and results of the market pay study.

“When you look at this from the bottom line perspective, it’s really the ability to attract talent, and have a compensation system that rewards folks for their efforts and their desire to stay on board,” Johanson explained.

In total, 117 different positions were evaluated in the fiscal court and the detention center. Johanson said the evaluation was done according to the system they set up back in 1985, and updated several times over the years. They also used the studies at the Department of Labor, so that they were not just dependent on public entities, but also considered the private sector.

He concluded that the fiscal court and the detention center came in about 7.54 percent behind the market.

“We also want to look at wage inflation, because we want to make sure that your pay structure is competitive for the next 12 to 18 months,” Johanson said. “So we look at wage inflation at 4.2 percent, and we bring both of those two together, for almost 11 to 12 percent, where we’re looking at developing the pay structure based on how far behind the mark is for the next 12 to 18 months at 4.2 percent. Then we also have the reference of the consumer price index at 6.5 percent. The midpoint is a competitive market.”

Judge Executive Kris Knochelmann asked what the difference is between wage inflation and market inflation, and Johanson said wage inflation is the average increase the employer plans to pay the employee during the next 12 to 18 months. The market is a combination of both wage and cost, where they take the consumer price index and evaluate whether or not the employer is going to move beyond the wage inflation rate. He said the market inflation rate is more fluid.

Johanson said that companies tend to do the studies every two to three years, and if the county does that, the next study would look more at the market inflation and less at the individual job positions.

A few of the department heads later thanked the court for doing the compensation study.

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