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Guide to Compensation Decisions 59 The only variables related to turnover are the size of the system and whether the system serves an urban area. Generally, systems with more staff and serving urban areas have higher turnover. Compensation and Unemployment Rates In urban areas, the higher the unemployment rate is, the lower the wages are. Intuitively this makes sense, because, if there is more unemployment in an area, workers may be willing to work for less. This doesn't hold true in rural areas--possibly because wages in the rural area are lower and more of the employees at these transit systems make close to the minimum wage. Overtime Wages and Budget Almost all rural and small urban transit systems pay staff for overtime hours at time and a half. Some systems surveyed had overtime hours as high as 80%. Balancing overtime versus hiring additional employees is fairly straightforward. If you are restricted in your use of part-time staff, some overtime can help you avoid hiring additional full-time staff and incurring their wages and the cost of benefits for a new employee. Based on the survey, overtime wages are related to the percentage of part-time staff at a tran- sit system; a higher percentage of part-time staff results in less overtime at the agency. This makes sense because managers can pull in part-time staff to cover peak service needs. In rural areas, the higher the turnover, the higher the percentage of overtime wages, which indicates that staff leav- ing may create a need for remaining staff to work overtime. This trend is not true in areas that include an urbanized area. Reasons for hiring additional staff rather than having current staff work overtime are You have maximized your use of part-time staff or have difficulty hiring and training part- timers. For approximately 1,400 annual overtime hours, you can purchase one full-time person in terms of wages (this level of overtime is equivalent to 2,080 hours of straight-time), though the cost of benefits would also need to be factored into the decision and your overtime hours have to be at a time that could be worked by one person for this to be feasible. Assuming that you are hiring an employee with benefits that would add 25% onto their salary, the breakeven point may be if you have 1,750 annual overtime hours that you can convert into one shift. High overtime at your system is affecting staff morale and job satisfaction/retention. Some employees may welcome the opportunity to work additional hours, while others may see over- time (especially unscheduled overtime) as a negative. If overtime is high enough to affect staff retention, adding additional staff to minimize overtime may save you the cost of hiring and training new employees. A final consideration with overtime is the effect of longer working hours on safety. Transit systems in the survey that have higher amounts of overtime also have higher operat- ing costs--even though these systems are not necessarily the largest in terms of number of vehi- cles, passenger trips, or total employees. This suggests that the budgets of systems with greater overtime (as a percentage of their overall wages) are negatively affected by the need to pay over- time at the higher rate. Peer Comparisons Using the Computer Tool The tool that accompanies this Guidebook was developed based on the survey data to help you compare your system with peer systems. When you enter the basic characteristics of your transit system, service area, and operating environment, the computer tool queries the database

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60 Employee Compensation Guidelines for Transit Providers in Rural and Small Urban Areas to compute and report salary and benefit characteristics of comparable systems. The tool has been created as an Excel spreadsheet for ease of use. The interactive tool is relatively simple to use and can be downloaded to your computer, allowing you to work off your hard drive. You can use the tool to explore "what if" scenarios by varying your inputs. For example, if you employ 45 employees and may expand services, requir- ing an additional 10 drivers, you may want to run the interactive tool two ways--one time select- ing 25-49 employees and one time selecting 50+ employees. Steps to use the tool are outlined below. The tool is built on a Microsoft Excel format, so some basic knowledge of Excel is required. 1. Download the Interactive Tool onto your Computer Go to the TRB Website/web document page at http://trb.org/news/blurb_detail.asp? id=9282 and link to the tool by clicking the statement The spreadsheet tool that accom- panies TCRP Report127 is available online. To save the tool on your computer select File and Save as. After saving the tool on your computer, open the Excel workbook to begin. If prompted to do so when opening the file, click on Enable Macros. The opening page will be the "Input" page. 2. Provide Inputs on Your Transit System, Service Area, Operations and Employees Provide information on your transit system, service area and employees by selecting one answer from the drop-down menu. If you do not answer an essential question, the wage and benefit reports will indicate there is insufficient data. 3. Review Wage Report When inputs are complete, click on the box at the bottom of the page for Wage Report. This report provides "low," "high," and "average" wages for 21 job classifications at tran- sit systems similar to yours. Placing your curser on a job title displays a brief description of the functions performed by employees in that job classification. Wages for the nine administrative positions are expressed as annual salaries, based on full- time employment. Wages for the twelve operations positions are expressed as hourly wages. Click the "back" button at the end of the page to return to the Input page. 4. Review Benefits Report Similarly, you can click on the box at the bottom of the page for the Benefits Report. This report provides you with a benefit profile for transit systems similar to yours including The percentage that offer a particular benefit and where the system contributes to the cost for the employee; The percentage that offer the benefit without contributing to the cost; and The percentage that do not offer the benefit at all. The report also indicates the percentage of similar transit systems that offer benefits to all employees, only full-time employees, or part-time employees with a minimum number of hours worked. Finally, the benefit report indicates how similar transit systems see their benefits package relative to the labor markets for their areas--"above," "about," or "below" other employ- ers in their area. Click the "back" button at the end of the page to return to the Input page.