TO: W. Calvin Horton, Town Manager
FROM: Patricia W. Thomas, Human Resources Director
SUBJECT: 75th Percentile Comparing Both Benefits and Salary to the Local Market
DATE: April 25, 2001
A Council member requested information on how the Town’s total compensation package — salary and benefits — would compare to the 75th percentile of the market.
For the April 5th benefits report I had surveyed area governmental organizations to determine the cost of a benefits package for the average Chapel Hill employee. The average Chapel Hill employee makes $35,700, has 8.69 years of service, and half of employees carry individual health insurance coverage while the other half carry dependent coverage. Therefore, for the survey I asked each area organization to provide cost figures on two hypothetical employees who were representative of the Chapel Hill workforce: each had a salary of $35,000 and one had 5 years of service and carried individual health coverage, while the other had 10 years of service and carried parent/children coverage [1].
To determine an approximate 75th percentile for benefits, I compared the Town’s package to the weighted average [2] of the plans from the other governmental organizations and calculated that:
· the total compensation for the average Town employee with $35,000 salary is $40,837; the benefits portion is $5,837
· the 75th percentile of total compensation in the local market is $40,351; the benefits portion is $5,351
Using these hypothetical average packages, the Town’s total compensation — salary and benefits — is approximately 1.2% higher than the 75th percentile.
ATTACHMENT
1. Chart depicting the 10 packages and the 75th, 50th, and 25th percentiles (p. 2).
[1] This was the type of coverage that reflected the average cost of Town health insurance coverage. In surveying other organizations, I requested that they report on the cost for parent/children coverage and, if they had more than one insurance company, to report the cost of their plan that is the most prevalent coverage selected by their employees.
[2] Using weighted averages each organization’s package is weighted in proportion to the number of employees, so that, for example, Raleigh and Wake County’s data count more than Carrboro’s and OWASA’s. The weighting allows a mathematical point at the 75th percentile to be determined.