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Hampton reviews pay options and minimum-wage scenarios; staff warns of compression costs
Summary
HR presented costs for 3–5% general wage increases, minimum-wage options up to $15, and targeted range/compression fixes; staff recommended a compensation consultant and phased, targeted steps to avoid morale problems from pay compression.
HR Director Nicole Clark walked council through options to increase overall pay and the city minimum wage and explained related cost and compression impacts.
"What you see here for the 3% is approximately $3,700,000 going all the way up to 6.1, almost $6,200,000 for 5% for the general fund only," Nicole Clark said while showing the cost table. She also outlined the cost to move the city minimum wage toward $12, $13.50 and $15 an hour and noted that the $15 option would cost roughly $1.79 million for the general fund just to raise those below $15 (not including compression). When compression and range adjustments are included, staff estimated the full cost to reach a $15 minimum across the general fund could rise to about $6.4 million.
Council members probed alternatives: targeted increases for hard-to-fill jobs, feathering the lowest tiers, and combining range updates with compression adjustments. Clark said public-safety ranges would likely require separate attention because recruits often enter at the same step as incumbents and are most affected by compression.
Staff recommended engaging an external compensation consultant (estimated $150,000–$225,000 in past procurements) to modernize pay structures and a phased approach to targeted range adjustments and compression remedies.
Council used its polling buttons to record preliminary preferences that staff will fold into budget planning and the public outreach schedule.
