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116 Strategies to Attract and Retain a Capable Transportation Workforce
departments across the nation, it is important that the specific needs of your agency are used to guide the
development and implementation of a program in your agency.
Exhibit 16-2
Industry Strategies: Restructuring Benefits and Compensation
Strategy Strategy Description
Research Competitive Public agencies often find the salary differential between public and private
Compensation sector jobs to be a significant factor in job decisions. To ensure public sector
agencies remain competitive, they should conduct regular assessments to
determine whether adjustments need to be made to the baseline as well as to
determine the frequency of salary adjustments. Recent research indicates that
improving compensation practices such as the structure and timing of wages
can increase employee retention (KFH Group, Inc., 2008).
Organizations who participated in our benchmarking study indicated that
wages are a primary tool for affecting retention. Participants from both public
and private organizations used salary surveys to determine how much
employees in a particular job are typically paid. Organizations have started
using different salary scales in parts of the state where there are a lot of private
industry competitors. At times, when market research identifies significant
compensation differentials, adjustments can lessen the competitive advantage
of private industry. Some organizations are able to offer matching
compensation for in-demand skill areas. If a potential candidate can provide
evidence that they have been offered a stronger compensation package, the
organization may attempt to match the offer.
Supplement with Organizations have begun to supplement their traditional benefits with
Alternative Benefits telecommuting, schedule flexibility, and job autonomy. Employees might see
Packages these benefits as a reason to remain with the organization even though they
have an opportunity to make more money elsewhere. Some organizations
indicated that an effort to redesign their benefits programs helped to retain
their younger workers (e.g., school options, technology training, and schedule
flexibility). These redesigns include allowing employees to pick the benefits
that meet their specific needs (i.e., cafeteria-style benefits). Retirement and
development (tuition) benefits were also mentioned by organizations as strong
solutions to retention challenges.
16.3 Workforce Practices. Fourteen workforce practices that were designed to assist in
making the process of "Restructuring Benefits and Compensation" within transportation agencies
efficient and effective were reviewed, and we identified two workforce practices that were the most
noteworthy within this context:
Santa Clara Valley Transportation Authority (VTA) Medical Opt-Out Program
North Carolina DOT Competency-Based Pay Program
For these two practices, we conducted a case study. Summaries of the two case studies are presented
below. The full case studies can be found on the TRB website at http://trb.org/Main/Blurbs/164747.aspx
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Restructuring Benefits and Compensation 117
as part of Volume II: Supplemental Materials. The full case study descriptions detail each practice's
background, implementation, maintenance, evaluation, and transferability.
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118 Strategies to Attract and Retain a Capable Transportation Workforce
Santa Clara Valley Transportation Authority (VTA) Medical Opt-Out Program. The Santa Clara
Valley Transportation Authority (VTA) employs
roughly 2,100 people, of which 650 work in
Santa Clara Valley Transportation
maintenance. In addition, VTA is combined with
Authority (VTA) Medical Opt-Out Program
the Congested Management Agency (CMA), which
adds another 800 employees to the total workforce. Job Type: All
ROI: Short-term
VTA's Opt-Out program has been in existence for Generation: All
10 years. VTA has a policy that all employees must
Key Program Highlights:
have health insurance to be employed. Originally,
employees were required to enroll in VTA's health o Addresses a desire by employees to
insurance. The Opt-Out program was intended to have a choice when it comes to health
address a desire by employees to have a choice insurance options and to not be
when it came to health insurance options and to not required to pay for health insurance
be required to pay for health insurance when they when they are already covered by
are already covered by another plan. another plan
o Offering greater flexibility when it
VTA's Medical Opt-Out program provides full-time comes to health insurance coverage
employees with the opportunity to choose not to has increased morale and
participate in the agency's health insurance program satisfaction among employees
and receive a taxable monthly payment if they have o Effective method of addressing high
other coverage. For example, employees may have costs while ensuring that all
other coverage through their veteran status or employees have health insurance
because they are covered under the health insurance coverage
of a family member that works outside of the
agency. The option provides an incentive of 50% of the employer cost meaning that if the employee (1)
has other coverage and (2) chooses to opt out, he/she will be receive the extra money in his/her paycheck.
Around 1998, the HR Manager for VTA developed a written proposal and submitted it to the General
Manager of VTA for evaluation and approval of the Opt-Out program. In the proposal, the manager
included evidence of the program's success at another agency (i.e., BART), the cost savings to
employees, and the potential cost savings for the agency. The manager also highlighted the potential for
increased morale and satisfaction among employees who were given more flexibility when it comes to
health insurance coverage. Once approved, employees were notified by an agency-wide memo explaining
the new Opt-Out program. New employees learn about the program during new hire orientation.
The program has produced the desired results. From anecdotal conversations with employees, VTA has
concluded that all employees are more satisfied that they have an option when it comes to health
insurance and the 5% of employees that use the Opt-Out option because of alternative coverage are even
more satisfied due to their financial incentive. This program is an effective method of addressing high
costs while ensuring that all employees have health insurance coverage. This program is specifically
useful during periods where health insurance costs are increasing.
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Restructuring Benefits and Compensation 119
North Carolina DOT Competency-Based Pay Program. The North Carolina Department of
Transportation (NCDOT) employs roughly 13,000 people, of which 7,500 work within the Division of
Highways. NCDOT's competency-based pay system was implemented based on an unfunded mandate by
the Office of State Personnel (OSP). The OSP
was seeking to implement a system that could North Carolina DOT Competency-Based Pay
be used across all state offices. When they Program
realized the skill block system implemented in Job Type: All
the late 1990s could not be used across state ROI: Short- to Mid-term
jobs due to its specificity, the blocks were Generation: All
generalized and broadened into competencies.
Key Program Highlights:
The five skill blocks were collapsed into three
groupings of competencies. The OSP chose to o Applies to transportation workers,
pilot the program first with NCDOT before supervisors, engineers, technicians, and
moving to other state agencies. the information technology group
o Competency blocks were developed
For the competency-based pay system, there are based on the initial skill block system in
three levels within three competency block order to be used across state jobs
groups: contributing, journeyman, and o Due to a lack of funding, competency
advanced. For example, a contributing blocks are only used for personal career
transportation worker can be a Level 1, Level 2, development
or Level 3. Employees are granted the
competency once they demonstrate proficiency
in the competency. Some of the agency's competencies have a specified time frame before the
competency is obtained. For example, for a lead worker, the competency blocks require specific training
and demonstration of the competency for 6 months prior to the employee being granted the competency
block. Competency-based pay for transportation workers is based entirely on function. Competency
blocks are set up based on the complexity of the function performed. For the agency's supervisors, there
are four different competencies. These competencies include: Planning and Organizing Work, Human
Resource Management, Fiscal/Budget, and Technical Competency.
NCDOT wanted to have a less subjective rating scale for the competencies than the "never,"
"sometimes," "always" convention so the agency conducted focus groups with workers and identified
work examples that helped to define each of the competency blocks and make the process of assessment
both more flexible and more refined. While the time required to develop these work examples cost the
agency money, NCDOT has not specifically tracked the cost of the program.
One of the challenges with the success of the program is that no funding has been provided to allow
NCDOT to compensate employees who have achieved specific competency blocks. Thus, at this time, the
competency blocks are simply used for personal career development and not used to make administrative
decisions. At this time, the program only applies to transportation workers, supervisors, engineers,
technicians, and the information technology group. The agency is still working through their accounting
and clerical classifications. The ultimate goal is to have all the jobs and all of the state government
positions switched to competency-based pay.
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120 Strategies to Attract and Retain a Capable Transportation Workforce
Other Example Practices
To serve as an additional resource for agencies interested in "Restructuring Benefits and Compensation,"
we have included a list of other practices that transportation agencies have implemented for this purpose.
Additional information on each of the following practices can be found in one- to two-page summaries
within the supplemental materials.
Application of Malcolm Baldrige National Job Benchmarking
Quality Award Criteria Performance Evaluations and Individualized
APTA Solutions for Workforce Challenges Training Plans
Digest Salary Survey
Compensation and Benefits Packages Telework
Florida DOT Deferred Retirement Option Santa Clara Valley Transportation Authority
Program Complete Compensation
HealthQuest State of Kansas Health and Workforce Development for the U.S.
Wellness Program Freight Railroad
Incentive Premiums
The practice summaries include information, such as the lead organization, practice description, practice
purpose, targeted participants, return on investment (ROI) timeline, influence of the economy,
innovativeness, and resources to find out more information on the individual practices.
