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SECTION 1
Introduction
Objective of the Guidebook
Welcome. This guidebook provides guidelines and tools to help providers of transit in rural Guidebook
and small urban areas make employee compensation decisions. These decisions are critical to
the economic health of your organization and can provide the key to good customer service. Section 1
Introduction
Because labor costs make up the highest portion of your transit expenses, hiring and retaining
employees are critical issues both in providing quality service and in managing your budget. As a Section 2 Wage and
public transit operator, you are challenged to provide high-quality transit services that are respon- Benefit Data
sive to the needs of your customers and the community as a whole. These challenges can only be met Section 3 Guide
if you have highly qualified and well-compensated employees; however, transit managers in rural to Compensation
and small urban areas often report being understaffed, particularly for drivers. Many such managers Decisions
report that recruitment, retention, and turnover are among their most pressing concerns (1).
Section 4
To make good, informed decisions about employee compensation, the Guidebook and tools Recruiting, Hiring,
are intended to assist you in understanding the following: and Retaining Staff
1. What Compensation Levels Are Appropriateby providing compensation levels with
defined job classifications (benchmarks) that you can use to assess compensation levels at
your system relative to your peers.
2. How to Attract and Retain High-Quality Employeesby suggesting ways to recruit, hire, and
retain desirable employees.
You may face many of the same employment issues that challenge other employers today. In
many areas of the country, unemployment rates are relatively low and the workforce is increas-
Research indicates
ingly mobile (making the pool of perspective employees lower). If you are like many of your
that hiring new
counterparts, you may not have the flexibility to raise pay levels or benefits so as to compete with
employees can cost
other employers in your area.
from 25% to 200% of
The effect that compensation levels have on your budget and your ability to hire and retain their annual salary
employees involves complex relationshipsthese are not necessarily intuitive. It is commonly (to hire, train, and
recognized that higher compensation levels allow transit systems to attract employees and reduce allow for time to
turnover; it may well be that higher compensation levels may result in lower labor costs overall. learn the job, etc.).
For example, providing higher compensation can reduce turnover and attract employees at Costs that are more
lower risk for accidents. This may actually be more cost-effective, particularly for jobs where difficult to estimate
the cost of training and orienting new employees is high. Further, transit systems with more include customer
effective compensation policies may be better able to reduce or control overtime wages. (These service disruption, loss
relationships are explored more in Section 3 of this Guidebook.) of morale, overtime,
and burnout among
The rest of Section 1 of the Guidebook provides a working definition of compensation,
remaining employees.
followed by a review of issues that you may encounter when making compensation decisions.
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