When it comes to compensation and employee compensation, the City of Lake Geneva isn’t exactly up to snuff.
Representatives from the McGrath Human Resources Group are currently conducting a compensation study for the City of Lake Geneva to determine whether City employees are earning wages that are competitive with current market and surrounding community rates.
City Council members approved on November 8, 2021 to hire the McGrath Human Resources Group to conduct the study at a cost not to exceed $40,000.
Victoria McGrath, CEO of the McGrath Human Resources Group, presented the study’s initial results to Lake Geneva officials at the May 9 city council meeting, which indicate that the city is below the average market rate in terms of employee compensation.
McGrath said about 73% of positions in the city don’t have an acceptable starting pay rate relative to the average market rate, which could make it difficult to attract employees.
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About 22% of positions match the market rate and 11% are at risk of falling outside the mid-market rate.
“It’s actually probably worse than it looks because a number of municipalities here have started hiring higher up in their salary range,” McGrath said. “They don’t use their minimum rates anymore because they know their minimum rates aren’t competitive.”
The study also indicates that 85% of the city’s median wages are below the mid-market rate, while 15% are in line with the market rate and 3% are at risk of falling out of rate.
“Basically saying your salary grid at this point, your minimum is not competitive and your midpoint is not representative of the average market,” McGrath said.
About 81% of the city’s maximum salaries are below the mid-market rate, while 19% are at the mid-market rate and 5% are at risk of falling outside the rate, according to the study.
“In real form, your maximums are not competitive,” McGrath said. “You have a number of municipalities that have much higher revenue potential than you.”
Factors other than salary
McGrath said city officials should consider factors other than salary when it comes to attracting employees.
She said there is currently a 37% decrease, nationwide, in the number of people applying for jobs. According to McGrath, more people want to work in the private sector than in the public sector because of higher pay and more flexible hours.
“Do I want to come and work for 14 dollars an hour in public works where I have to get up at 2 a.m. so that Lake Geneva is presentable by the time your visitors start to arrive or can I work at McDonald’s for $16 an hour making burgers from 8 a.m. to 5 p.m.?” McGrath said. “So there’s a lot more competition than there was. It’s definitely a market of buyers and not for people who are recruiting.
McGrath said Lake Geneva is located near several municipalities, which also creates competition for hiring staff.
“You have a lot of competition around you. Some of them are bigger cities,” McGrath said. “Nowadays it doesn’t take much to get in a car and drive for 20 minutes to half an hour. There are plenty of opportunities.
The average number of years people work for the City of Lake Geneva is around seven years, compared to six years for most public sector jobs, according to the study.
“So you’re slightly above average in terms of years of service,” McGrath said.
The average age of the oldest employees is 50 years and over.
“It’s the group that holds most of your tenure,” McGrath said. “As these people start to walk out the door due to retirement, your years of service will go down because they’re the ones holding that average right now.”
McGrath said about 41% of city employees are 40 and under, which is considered the “mobile generation” because they are more likely to seek other job opportunities. She said the average number of years that employees aged 40 and under continue to work for the City of Lake Geneva is around four.
“They’re not tied to any organization, and if they can get an extra $5 an hour working the streets, they walk away,” McGrath said. “So the question is going to be what are you going to do to keep these people here?” They’re in the door, but what are you going to do to hold them back and it’s not going to give the kinds of pay raises you have.
Continue the study
McGrath said his company will continue the compensation study and present the final results in the coming months. She said, so far, she has interviewed city administration, department heads and managers for the study.
Representatives from the McGrath Human Resources Group plan to use the study results to help the city develop an updated salary schedule.
“Right now we’re at the point where we’re going to take all of this data and we’re going to develop a salary schedule, and that salary schedule is usually based on a guided philosophy of where you want to be in the market,” said McGrath said.
Alderman Shari Straube, who runs a business in downtown Lake Geneva, said she was in favor of city workers being better paid to encourage them to continue working for the city.
“If people don’t feel appreciated in their jobs, if they don’t like coming to work, they won’t stay here,” Straube said.