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O'Fallon HR presents 2025 compensation study results; recommends range adjustments, compression fixes and modest merit
Summary
Human resources presented Higbee Associates' 2025 pay study and recommended range updates, limited compression increases and a 2.5% merit pool for eligible employees.
Human resources lead Tanya Davies presented the results of the city’s 2025 compensation study conducted with Higbee Associates. The study compared O'Fallon pay ranges with peer cities and recommended targeted changes to address remaining gaps and internal compression.
Key recommendations: The report recommends raising range minimums where positions are below the 70th percentile, moving public-safety positions from steps to open ranges, and applying compression adjustments to incumbents who would fall below new minimums. "Anybody below the minimum of the new range would go to the new minimum," Davies said. The staff recommendation is a 3% shift in the wage schedule (affecting ranges) and a 2.5% merit increase for eligible employees (contingent on a successful performance evaluation). The proposal also includes a maximum compression payment of $1,500 and a tenure-based compression formula (1% per year up to 5 years) to address internal inequities.
Benefits and budget impacts: Benefits staff reported modest increases in medical and dental premiums for 2026 and a required IRS-related change to high-deductible plan limits. City staff said the 2026 budget already includes the proposed pay and benefit cost estimates, and that the city would absorb a portion of premium increases to limit employee out-of-pocket changes.
Why it matters: The compensation changes are intended to maintain competitiveness in the labor market and reduce turnover, especially for public-safety positions where the study found police officer and sergeant minimums trailing some comparators. HR said a future pay study is scheduled for 2028 with a 2029 implementation date.
What council asked: Council members asked about cost and implementation details; HR staff confirmed the compensation-study implementation costs were included in the presented 2026 budget and explained how compression and merit eligibility would be managed.
Next steps: Council will consider the compensation elements as part of the overall 2026 budget process. Implementation timing discussed in the meeting targets Jan. 1, 2026 for range changes and compression calculations.
