GOVERNMENT OF THE DISTRICT OF COLUMBIA OFFICE OF LABOR RELATIONS & COLLECTIVE BARGAINING

Report and Analysis of Compensation Unit 13 & DMH-DCNA Nurses Proposed Wage Adjustments
CONFIDENTIAL

Michelle Lamb Moone, SPHR Associate Director, Compensation and Classification Parris Sims Michael Rumberg Compensation Analysts Carla Gadsden Research Analyst December 2010
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Introduction and Purpose In preparation for pending negotiations with Compensation Unit 13 Nurses and Department of Mental Health DCNA Nurses, OLRCB has compiled the following report and analysis of current wages and proposed increases. By law, the D.C. Code requires that this analysis consider the compensation practices of the local labor market and that the District maintain competitiveness with respect to these. This study takes into consideration macroeconomic factors, which present a unique challenge in the current environment, as well as internal recruitment and retention issues to arrive at a reasonable estimation of proposed wage increases through FY 2013.

Current Compensation The following tables show the Districts current compensation for unionized Nurses. It is important to note that there are two groups of unionized Nurses in the District presented in this data. Department of Mental Health Nurses and Compensation Unit 13 Nurses both share the same salary schedule. In order to facilitate a simple understanding of career potential compensation we have looked at Nurses base pay across the spectrum of expertise and knowledge progression (i.e. from entry-level or Nurse Graduate to the most advanced or Nurse Specialist II classifications). We compare the compensation that is potentially attainable as the Salary Schedule data to the compensation the District currently pays to unionized Nurses, or Actual data. Schedule Min. $50,944 Schedule Median $73,912 Schedule Max. $97,437

Actual Min. $50,944

Actual Median $82,852

Actual Max. $97,437

Current wages appear consistent with the salary schedule. Schedule and Actual data are very much aligned as far as bottom and top pay meaning, that incumbent employees have penetrated the full range of career levels available. The Actual median is significantly above the salary schedule median, indicating that there are proportionally more unionized Nurses at the higher levels of pay and the higher career levels in the District. OVERTIME It is important to note that the District currently District Department of Mental Health currently incorporates very liberal overtime practices with some psychiatric Nurses earning up to $70,000 (2009) in overtime above their base pay. For a Nurse at the top of the base salary schedule that represents 70% above their base pay. This must be factored in when analyzing our pay practices versus competitors, and may also be an area to consider revising in light of current macroeconomic and budgetary concerns.
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Competitor Compensation Comparisons Analysis of the competitive labor market for identical or similar Registered Nurse practitioners at identical or similar levels of experience and education is vital for establishing the appropriate level of compensation parity. The combination of labor market comparisons and an internal analysis of labor demand relative to external supply allow any organization to establish the appropriate labor prices in relation to peers. The following data will compare District of Columbia unionized Nurses compensation to national and local trends.
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National 10th % $42,020

National Median $60,000 Regional Median $69,570 DC Median $82,852

National 90th % $87,310 Regional 90th % $93,900 DC 90th % $91,150

Regional 10th % $48,100 DC 10th% $69,538

The above data compares National and Regional statistics for Registered Nurses with the compensation schedule offered to unionized Nurses in the District of Columbia. It is important to note that the National and Regional data provided by the Bureau of Labor Statistics includes both private and public Nurse practitioners, with the inherent expectation that private sector data will tend to skew the Regional and National statistics upwards. However, we can still see that the District, as a public sector employer, remains competitive across the board. The median annualized compensation for DC Nurses is approximately 20% higher than the Regional statistics and approximately 40% higher than the National figures. Additionally, the District bottom-tenth percentile exceeds the Region and Nation by at least 45% and the top-tenth percentile is competitively right between that of the Region and of the Nation. This clearly demonstrates that the District is competitive if not superior with regard to union Nurses compensation.

Bureau of Labor Statistics, Registered Nurses National and Regional Data, May 2009 release date 2010 DC Department of Human Resources

PRIVATE / PUBLIC DC Nurses Howard University Childrens Hospital Washington Hospital Center Alexandria County Frederick County Montgomery County

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Schedule Min.

Schedule Median $73,912(3rdof 7) $69,745 $81,099 $92,527 $63,845 $68,580 $71,047

Schedule Max. $97,437 (3rdof 7) $94,206 $125,112 $129,440 $89,476 $88,000 $93,944

$50,944(5th of 7) $51,632 $45,760 $55,613 $51,500 $51,500 $47,028

When comparing District Nurses to specific hospitals and jurisdictions in the competitive area we see that the District is competitive almost to the dead center. It is important to note that two of the private hospitals, Washington Hospital Center and Childrens hospital, are nationally and internationally recognized medical centers for certain specialties and therefore their top end compensation reflects this, with their compensation significantly higher than other competitors. If we exclude the private hospitals, the District virtually leads across the board (with entry pay at a virtual three-way tie with other jurisdictions). The resulting hypothesis is that any issues the District may currently be facing with regards to recruitment and retention of the best quality Nurses in the local area labor market are probably unrelated to core compensation and more tied into non-monetary items including marketing, work conditions and schedules, training requirements, and other issues.

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Competitor data retrieved from organization website and/or request for information, January 2009 2010 DC Department of Human Resources

Macroeconomic Considerations In contemplating the direction the District should take with regards to any change in compensation for Nurses, the current Macroeconomic environment must be addressed. The United States economy is currently entrenched in what may become one of the deepest and longest recessions of this countrys history. The District has not been immune from the spill-over effects that this recession has and will continue to have for local governments. GDP growth 2009iii -2.0% Revenue growth 2009 -0.1% GDP growth 2010 0.6% Revenue growth 2010 1.3% Unemployment Unemployment 2009iv 2010 7.1%-7.6% 6.5%-7.3% Unemployment Unemployment 2009 2010 8.5% 9.8%

National

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The unexpected arrival and depth of this economic crisis have forced both National and Local economic forecasts to be downgraded significantly from numbers present in subsequent financial plans. Economic and revenue growth for the District as well as the Nation is expected to be negative for 2009 and very slow through 2010. Unemployment in the District is expected to rise through 2010 and perhaps beyond. These types of factors forecast a labor hiring market that will be increasingly tight and a labor compensation market that may stagnate or even decline (if layoffs, salary and wage freezes, and salary reductions and furloughs are taken into account). Budgetary and revenue pressures will force employers, including the District, to limit salary and wage increases and perhaps even consider stronger cost-management measures. The Office of the Chief Financial Officer for the District estimates that we will experience a $127,100,000 budget shortfall for 2009 and a $303,800,00 shortfall for 2010 from our current financial plan (as of September 2008). These projections will force the District to revise planned increases in wages and salaries across the board along with other labor-cost management measures. The City Administrators November 2008 discussion with staff at the Office of Labor Relations and Collective Bargaining suggested that increases for Union employees including Nurses may fall between 0-3% through 2010. However, since this discussion occurred prior to the OCFOs revised budgetary forecast (December, 2008) the ceiling of 3% may also have to be revised.

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GDP data from Economist Intelligence Unit, The Economist Group, 2009 online forecast of US economy Unemployment data from Federal Open Market Committee, US Federal Reserve, January 2009 online data v D.C. Office of Chief Financial Officer, December 2008 revenue and economic forecasts 2010 DC Department of Human Resources 5

Internal Recruitment & Retention Issues In discussion with the Department of Mental Health about DCNA Nurses recruitment and retention, we uncovered the following key issues: y y y y y Strenuous schedules and tours of duty in comparison with competitors o Poor Alternative Work Schedule program Retirement incentive significantly preferred to continuing work Tendency to hire at entry-level and promote from within Relatively small labor market pool for experienced Psychiatric Nurses High utilization of contract Nurses o Contract arrangement has many perks that are tough to match or counter o Over $5million/ yr spent on overtime to contractors AWS programs hard to implement with FTEs because of staffing requirements Part-time employees are not bargaining unit members Lack of publicity and utilization of Employee Referral Program Lack of publicity of $750/ yr training bonus In-house training with continuing education credits desirable Saturday premium pay for Nurses is cumbersome to back track

y y y y y y

The tone of the conversation with senior staff at the Department of Mental Health along with the items highlighted above demonstrate a host of potential recruitment and retention issues that are largely unrelated to direct compensation. A combination of better marketing of existing benefits and perks, plus a change in policies and procedures to allow more flexibility in work schedule and in-house training and career development would solve the majority of the above issues. Particularly given current and forthcoming budgetary constraints related to the economy it may be a more prudent decision for Management to focus on these non-compensatory adjustments in order to attract and maintain ideal staff levels.

Summary & Conclusion

In summary, this report and analysis has demonstrated that the District of Columbia does indeed maintain market competitive and internally equitable compensation levels for its Compensation Unit 13 and DMH-DCNA Nurses. Compared to specific local comparators, the District is at least on par if not superior in terms of compensation. Macroeconomic factors of the immediate time and the following few years will make it hard to implement any significant percentage increases for these Nurses, but that fact may be mitigated by the common experience of all other employers in the local labor market. Hence, even without and significant change in compensation level, the District will likely remain competitive over the next few years staying somewhere close to current levels. Finally, the District in collaboration with DCNA may be able to improve recruitment and retention and increase the attractiveness of the Nursing offer with the District by working to improve working schedules, conditions, training, and other aspects cited by the Agency heads.

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Compensation and Classification Recommendations y y y y Review Nurses overtime policies and practices and revise to be consistent with economic realities as well as competitive pay practices Focus on improving Nurse recruitment and retention through non-monetary incentives and programs such as training, and alternative work schedules Employ both Union and Management more in advertising and educating Nurses on incentives and programs that are underutilized (such as employee-referral) Maintain current rates of base pay and consider revising incentives and programs first in any decision to manage employment costs in light of current economic and budgetary conditions

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