Raleigh staff say pay ranges lag market; classification overhaul and benefit proposals planned for FY26

Charnell Jones, director of Human Resources for the City of Raleigh, and consultants from Segal told the City Council at a work session that the city’s pay ranges are, on average, below market and that staff will return with implementation options during the FY26 budget process.

The council heard that a comprehensive classification and compensation study, launched in 2024 and conducted with Segal, found Raleigh’s published pay range midpoints averaged about 91% of the blended market midpoint. Segal recommended expanding the city’s classification list from roughly 350 to about 485 job classifications and establishing 37 job families to better reflect employee duties and career progression. Patrick Bracknell, senior vice president with Segal, said the consultant selected 101 benchmark jobs and surveyed up to 12 peer employers to create the market comparison.

Jones said the city will phase implementation and present cost scenarios to council during the April–May budget process. She noted that FY25 investments already included roughly $26.6 million in workforce investments — about $11.1 million for public safety market adjustments and $12 million for other market adjustments and annual increases — and that bringing ranges fully into market would require additional funding. City staff estimated that a 1% across-the-board increase for all employees is roughly $3.75 million, 5% is $18.75 million and 15% is $56.25 million. Based on Segal’s findings, Jones said the estimated budgetary range to address shortened midpoints was roughly $33.8 million to $52.5 million depending on the implementation approach.

On benefits, Jones said medical benefits remain the city’s largest expense at about $58.7 million for active employees and that the city is self-funded with a stop-loss attachment (the transcript references $375,000). Jones said the city’s broker, USI, projects the city trending below typical national forecast rates; staff reported no premiums increases will be proposed for employees in FY26 for medical, dental or vision plans. Staff also proposed one plan change: an expansion and increase to the city’s tuition-reimbursement program to include workshops and certifications, noting that the change will require review by the Civil Service Commission before final policy approval.

Council members asked for more detail about the vacancy-rate improvements Jones cited (the vacancy rate showed a decline from about 14.9% in March 2022 to 10.7% as of the most recent snapshot) and for a historical breakdown of vacancies. Jones provided a head-count snapshot of roughly 456 full-time and 36 permanent part-time vacancies and agreed to provide the council the earlier-year vacancy counts requested.

Segal and staff described implementation trade-offs including whether to raise employees to new pay-range minimums, apply market adjustments, or provide annual pay increases. Segal said the city’s existing pay-range widths average about 70% (minimum to maximum) compared with a market-average width of about 57%, which affects internal progression and pay-compression considerations. Staff said they will finalize proposed salary structures, identify Fair Labor Standards Act (FLSA) exempt/nonexempt reclassifications where appropriate, draft updated job descriptions for the proposed classifications, and return with cost scenarios for council consideration.

The city indicated it will bring final classification-and-compensation recommendations and an implementation approach to the council as part of the FY26 budget process; no formal council action was taken at the work session.

Less critical details: staff said they will launch a benefits survey in the summer and issue an RFP for a new broker; they also listed past FY25 benefit enhancements including a part-time benefit package, a continuous service incentive, parking incentives for downtown employees and the addition of the North Carolina 529 savings plan as an employee offering.