University base pay below average

Faculty and staff salaries were below market value in fiscal year 2011-12.
September 18, 2013

University of Minnesota faculty and staff members are paid less than average market wages but are compensated with employee benefits, according to the Office of Human Resources.

A Thursday presentation to a Board of Regents committee showed base salaries for University employees were nearly $3,300 less than salaries of comparable employees nationwide in fiscal year 2011-12.

University salary increases are also slower than those of other Twin Cities employers and educational institutions across the country, according to the report.

Employees are compensated with a “strong” benefits package that helps recruit and retain employees, according to OHR Vice President Kathy Brown.

“The value of our benefits is probably a little high in relationship to our Big Ten peers,” she said at the meeting.

The report showed that many senior leadership positions, like vice presidents and deans, are also generally paid at or below market rates.

Brown said in an interview that some administrators have higher salaries because they have more experience at the University.

Total compensation, including salaries and benefits, for University employees made up 61 percent of the institution’s total expenditures in 2012.

Brown said that percentage has remained “very stable” in recent years.

In the meeting, Brown described employee compensation as a “tension on a line” between enticing prospective employees with attractive salaries and benefits while also spending public dollars responsibly.

Regent Richard Beeson said at the meeting that the University shouldn’t always remain in the “safe zone,” or close to national averages, if it wants to attract top talent.

“Most everyone gravitates towards the 50 percent line,” he said, “and I think that’s a cop-out.”

Regent Patricia Simmons said at the meeting that it’s difficult to determine “actual labor costs” and compare the University to its peers because only base pay was included in many of OHR’s models.

Brown responded by saying OHR will work to find statistics comparing University employees’ total compensation — including benefits like paid time off and life insurance — with Big Ten peer institutions.

Regent John Frobenius said at the meeting that he believes more work needs to be done in order to have an accurate definition of total compensation.

UPlan findings

In addition to base salaries, the OHR report examined increasing health care costs and how they affect the University’s health plan.

The results showed that although national health care costs have been growing since the 2007-08 academic year, costs for the UPlan — the University’s employee health benefits plan — have grown more slowly.

Brown said OHR has been and will be working extensively to ensure the University is ready when the Affordable Care Act takes effect next year.

Associated Content

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