The Ocean Pines Association has agreed to terms with New York firm Sibson Consulting for a comprehensive compensation study to include employee wages and benefits.
According to the contract the total fixed fee, including expenses, will be $48,000 to $51,000.
The Board of Directors earlier this month voted 6-0 to authorize General Manager John Viola to negotiate a contract for the study. According to the formal Board motion, the contract amount was “not to exceed $100,000” and would include an “analysis of all positions and salaries, [an] external salary survey, benefits study, development of a compensation philosophy, and development of an implementation plan.”
Budgeted funding for the study was $25,000, but a workgroup later agreed the higher cost was “justified based on need for the scope of services that are proposed,” according to Director Colette Horn.
“The consultant will be helping Ocean Pines develop a strategy for making any compensation adjustments needed, based on their findings and based on upcoming changes to minimum wage,” Horn said. “They will be providing us with tools to set and adjust compensation such that we will be able to forecast payroll and benefit costs more than a year at a time.”
The finalized contract, signed on Wednesday, features several phases of work, with Sibson set to create “a customized salary, benefits and pay practices market survey with up to 30 benchmark job titles, to be distributed to up to 12 HOAs and municipalities.” Sibson will then compare salary ranges and benefits packages with other homeowner’s associations and cities, and draft a report on the findings.
Based on the report, Sibson will develop pay schedules and recommend salary structures and incentives that “can be supported without excessive increases to the yearly property owner assessments.” The firm will estimate the cost of implementing the recommended changes “to provide parity with the identified market.”
In a final phase, Sibson will craft a presentation for the Ocean Pines Board and homeowners.
General Manager John Viola the said cost was lower than first estimated because Ocean Pines would take on some of the work, including writing job descriptions using Sibson-approved templates.
The firm is scheduled to start work on Aug. 7, with a target of finishing by the end of October. Viola said that timeline would allow the study results to be factored into the fiscal 2021 budget.
“We want a comprehensive, benchmarked evaluation, by position, with a review of job descriptions and compensation ranges including a minimum, maximum and midpoint,” Viola said. “It has to be a complete, comprehensive analysis of our compensation package – and not just salary.”
Viola said the study would provide transparency both for the assessment-paying homeowners and the employees who work for the Association.
“It’s also important to make sure we’re paying everybody fairly and that we have the proper package to attract the proper talent,” he said.
Viola added the increased cost would not negatively impact the budget, with additional money likely coming from a prior–year budget surplus.
Along with Viola, the workgroup that helped negotiate the contract included Board members Horn, Jeff Knepper and Frank Daly, Operations Director Colby Phillips, Finance Director Steve Phillips, Golf Director John Malinowski, Budget and Finance Committee Chairman Larry Perrone, former Board member Tom Terry, and Executive Secretary Michelle Bennett.
Bennett, who has taken a lead on the project, offered an employee’s perspective.
“As the employees received benefit cuts and no pay increases this year, it was not an easy decision to spend this money,” she said. “However, the community and the employees deserve a study we can all believe in and follow through with. We believe this will help both groups in the long term.”
Terry said it was “important that an organization of this size have a full understanding of its employees’ compensation package.”
“This is especially true since major adjustments have been made recently, which have destabilized long established norms,” he said. “Updates need to be made to assure we have a competitive compensation package, while meeting the financial capabilities of the OPA.
“The results of this study, and consultation with independent experts, will hopefully establish a new foundation for OPA compensation to eliminate ongoing changes,” Terry continued. “It is important to provide a stable and understandable compensation program.”
Daly said the study was necessary because Ocean Pines has “two contemporary studies with conflicting information.”
“One shows nobody being overcompensated, while the other shows about 10 percent of the employees being overcompensated,” he said. “One study does not include the Police Department and one does not consider similar positions in other Maryland or Eastern Shore HOA’s.
“Neither take into consideration the seasonal impact of employment on the Eastern Shore,” Daly continued. “Neither present an ‘in-depth’ analysis of the employee benefit package, nor compares them to other Eastern Shore benefit packages. Also, although both studies say some employees are underpaid, there are inconsistencies as to who and how much.”