Welcome to the work session where we will be covering a lot of compensation and human resource issues.

I am going to uh well, first off, Jane Harrison is excused and on the road, and I believe Mayor Pro Temp Fort is walking in, making a grand entrance.

Um I'm gonna turn it over to uh Sharnell Jones Human Resources to present the first uh item.

Good afternoon, Mayor and City Council.

Um we are here to provide a update on benefits and compensation for FY 26.

In today's agenda, we will cover total rewards.

Um, we will also provide an update for employee benefits, the classification and compensation study will give an update, employee compensation, and then talk about next steps.

We understand and know that our employees are our greatest asset, and so it's important that we provide a competitive total rewards package that helps us to be able to attract and retain employees.

So when we think about total rewards, it's just not paying benefits, but it also includes our employee development, employee recognition, and also work life balance.

For today's purposes, we will be focusing on employee compensation, employee benefits, and also an aspect of employee development.

So let's get started with employee benefits.

Our medical benefits are our largest expense.

Um, if you include the city's portion as well as the employee portion, it is roughly over 58.7 million.

And that's just for active employees.

The city is self-funded, and so we are responsible for all claims up to that $375,000.

Medical benefits, however, are on the rise and are expected to arise between seven and seven point nine percent in 2025.

But according to Understand Service and Innovate Insurance Services, which is USI, the city's broker, the civic, the city on average is trending below that by point nine percent.

And this has contributed to the enhancements in our program design, our plan design, and also offering additional benefits and wellness offerings, which has guided our multi-year health, been guided by our multi-year health and benefit strategy.

And so if you look on here, this is our multi-year health benefit strategy.

All of the check marks shows the things that we implemented thus far at FY25.

We will also be launching a benefit survey this summer and also looking at a doing a request for proposal for our broker.

So for FY26 and 27, we will focus on continuing to look at our program design, how to enhance plan A, also looking at our employee health center, reviewing our employee premiums, and also our wellness incentives.

So for FY25, you can see all the things that we implemented.

We enhanced our program designs for medical, dental, as well as wellness.

We also added a host of benefits and incentives, such as leave.

Um we added a part-time benefit 30 package, we added pet insurance, the North Carolina 529 savings plan.

We also implemented the continuance service incentive, and we did a parking incentive as well for our downtown employees.

Last year there was no increase to employee premiums.

So, what are we proposing for FY26?

I mean, for the 26th calendar year.

There will be no changes in regards to our dental plan and our vision, but as always, we're continuing to look for ways to enhance Plan A to differentiate that from plan B.

We will also have no changes as it relates to our wellness assessment, annual wellness assessment that will stay the same as the previous year.

No premium increases for employees for medical, dental, or vision, or our voluntary benefits.

We are proposing one plan change, which will be our tuition reimbursement assistance program.

We are wanting to increase that reimbursement and also expand that to cover workshops and certification programs as well.

As you know, that is a policy change, so that we'll have to go to Civil Service Commission and then we'll bring the policy back to you for final review.

So what we all have been waiting for classification and compensation study update.

Our goal with this comprehensive classification and compensation study update has been to make sure that we have classifications that accurately reflect the work that our employees do, and that we also have pay structures that are competitive in the market to help us to be able to attract and retain employees.

Back in 2024, we kicked off this comprehensive classification and compensation study, and we're almost not quite at the point of implementation for FY26, beginning to phase that in.

So without further ado, I do have our consultants here today to give us an update on where we are with the classification and compensation study from Siegel, and I will bring up Patrick Bracken to kick that off.

Good afternoon.

My name is Patrick Bracken.

I'm a senior vice president with Siegel.

For those that don't know, SEGL is a national human resources consulting firm.

We've been privileged to be partnering with the city over the last 14 months now on the comprehensive classification and compensation study.

And my aim here today is to brief you on partly where we've been, um, what we found and what the next steps are.

For today's agenda, we have a couple items.

Um first, we want to orient you to the overall project plan, then talk with you in a little more detail about the job classification structure, um, our market assessment methodology, which is the compensation study, um, the findings that come from that compensation analysis, uh, the salary structure design and the guiding principles around those, and then close out with next steps.

So this project in totality was multi-phased.

We put together this graphic just to give you a sense of what the path has looked like over the last 14 months or so.

But roughly speaking, um, at the beginning of the engagement, we were in the spring of 2024, we were on site and meeting with um Raleigh project team and stakeholders to scope out some of the key project parameters and also to kick off what we call the job description questionnaire process, the JDQ process.

Um this was a process that was meant to solicit the feedback from employees directly as to the job functions they perform and help gain stronger insights into the current job classification structure that the city maintains and use the JDQ information to help reform or improve the way the classification structure operates and the way that jobs are both described as well as the knowledge and skills and abilities that are used to perform those.

We then use that information to help us launch into the compensation market assessment phase.

This entailed, and I have a couple more slides on this in detail, but a custom survey process that Siegel conducted, and then used that information to help inform our findings and recommendations on uh improvements or suggestions for improvements to the uh compensation structures that the city currently maintains.

So a little bit more on the job classification structure process.

Um as I mentioned earlier, um, employees were invited to participate in the process because of the um size of the project and um the um efficiencies associated with the JDQs, um, what were called job ambassadors or JDQ ambassadors were identified through a collaborative process with um human resources as well as department leadership.

Pleased to report that about 95% of the JDQs were completed, which is a very strong response rate, and really gave us a good foundation from employees directly as to what is required for their jobs and helped us determine what job functions were appropriate and currently described and which opportunities existed for either refinements or improvements to the classification structure.

Overall, our current classification analysis suggested that the city would benefit from an expansion of the number of classifications it currently has, which is approximately 350 to about 485 job classifications.

And the primary goal of the expansion of these is to help better define and more accurately define the types and level of work that are actually being performed by employees.

It also better aligns with the what we would typically see in terms of a total number of classifications for an employer of this size.