Western works to address low salaries

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Western works to address low salaries

fr salaries When Bill Yang decided to leave the world of private industry to join Western Carolina University’s School of Engineering and Technology eight years ago, he fully expected that the transition to academia would bring with it a slash in salary.

“What I had not anticipated was because of the economic downturns and budget cuts we don’t have much of an increase in compensation. So that’s a little bit disheartening,” said Yang, associate professor of engineering and chair of WCU’s Faculty Senate.

Staff turnover and growing enrollment mean the engineering school is constantly in hiring mode, Yang said, but it’s not unusual for people to turn down job offers.

“Judging from what I see around this department, I think the sluggish salaries really is not helping,” Yang said.

Intentionally planning for pay increase

It’s a problem of which university administration is well aware, and over the last few years there’s been a concerted effort to boost salaries to a more competitive level. In 2013, WCU decided to set the floor for salaries at 72.5 percent of the market rate, an improvement over the existing situation in which some people were earning 100 percent of the rate while others were as low as 62 percent. The move also included a decision to set a minimum salary of $24,000 — at the time, 23 employees worked for less than that.

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“This was really an intentional plan to address those particular positions and have a plan going forward,” said Cory Causby, associate vice chancellor for human resources.

In 2014, WCU bumped the $24,000 floor to $25,000 and set the base market rate at 75 percent. And last year, the rate went to 77.5 percent. No decision has been made yet about this year’s salary changes, because the university is waiting for the state budget to be ratified and allocations to become final.

Yang said he appreciates the efforts administrators have made in the past years to address salary issues, though he believes there’s still a long way to go. But he’s not blaming WCU leadership.

“The chancellor really wants to address this issue, but the resources are not there,” he said.

Causby would agree with that assessment.

“A lot of it can be traced back to many years without legislative increases and limited resources at the institution to address salaries,” Causby said. “As a result, salaries began to fall behind.”

The current push to boost salaries uses a combination of legislative increases and budgetary creativity to achieve the goal. In 2015, for example, the legislature didn’t approve any permanent increase in base salary but did provide one-time bonuses of $750. In 2014, support staff were given a $1,000 raise. For 2016, it’s looking like a 1.5 percent salary increase will be budgeted for faculty and staff. However, the state salary scale itself hasn’t been adjusted only once since 2008.

Meanwhile, about two-thirds of WCU employees — 954 people — have received some sort of increase through recent university efforts to bring salaries up. Last year, the university spent $986,000 toward the goal, an average of $841 per employee.

But boosting the bottom earners and people on the low side of market rate has created other issues. In addition to increasing compensation for people at the bottom of the pay scale, WCU has had to address issues such as salary inversion and salary compression. Making sure new hires come on at a competitive rate is all well and good, but veteran employees are likely to feel slighted — or even leave for greener pastures — if people who have been there for a shorter amount of time or who rank below them make the same or more than they do.

“Part of what we’re doing is trying to address those situations and making sure we have an appropriate spread on salaries,” Causby said.

It can be an uphill battle. Market rates fluctuate, so sometimes it’s a struggle just to maintain a place on the scale, let alone rise higher.

Navigating new overtime rules

New federal overtime rules will also present a challenge where salaries are concerned. Beginning Dec. 1, anyone making less than $47,476 will be entitled to overtime pay or compensatory leave for working more than 40 hours a week — currently, the threshold is set at $23,660. In 2020, the threshold will rise yet again.

“It will be a challenge just because it will be another area where funding will potentially have to be diverted to make sure we’re in compliance with the new regulations,” Causby said.

For any individual position, the university has several choices as to how to react to the new rules. It could bump the salary to $47,476 to ensure the employee is exempt from the overtime rules. It could pay out overtime for hours exceeding 40 per week. Or, it could simply limit the employee to 40 hours per week, even if that means a reduction in the services that employee can provide.

The university currently employs 130 people below the $47,476 threshold, and bringing all salaries up to that standard would cost about $1 million.

“It will definitely have a financial implication in some form or fashion,” Causby said. “If you’re having to take money to address that, that takes money you may have allocated to address salaries in general.”

Western won’t actually spend $1 million to address the issue, though, because not all salaries will be bumped to the new exempt threshold.

The university currently has 130 employees who are exempt from overtime rules but will no longer be exempt once the $47,476 threshold is implemented — bringing all their salaries up to the new threshold would cost about $1 million.

Impacts from N.C. Promise

N.C. Promise, an initiative the legislature passed to cap WCU’s tuition at $500 in an effort to make college more affordable, could also have an impact on student services. The legislation includes a provision that student fees go down by 5 percent in 2018 as compared to 2016 levels, with a maximum increase of 3 percent in subsequent years.

While the university has voiced strong support for the program as a way to extend a college education to those without the deepest of pockets, Causby allowed that the fee reduction component would likely impact student services positions, many of which are fee-supported.

“Anything that’s fee-supported, if you have to take any substantial cuts in those areas you have to either find a supplemental source of funding to offset that or you have to make cuts,” he said.

Yang commented that N.C. Promise could also necessitate hiring more faculty, at least in the long run. WCU has always prided itself on being a home for students who are the first in their families to go to college, who have potential but need help developing it. Small class sizes and access to faculty is key to that identity. If tuition is cheaper, the thinking goes, more applications are likely to pour in, so the university will have to be more selective if it holds enrollment steady.

“I guess it really boils down to if we want this program to be successful and we want students to achieve what N.C. Promise sets out to do, we’ll need more personnel, more faculty members to support that,” Yang said.

The challenges are many, but Causby said he’s positive about the future.

“I’ve been real pleased with the commitment that Western’s made even in difficult financial times to address salaries and to do what we can to move salaries forward,” he said.

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