City considers opportunities for paying competitive wages for quality workers

There was a time when a quarter of the American workforce was out of work, and there were no jobs to be had. Unemployment relief during the Great Depression was nonexistent.

Just three years ago during the COVID-19 pandemic, the U.S. unemployment rate soared to 14.7%. In Oklahoma, the jobless rate hit 12.6%, and in Sequoyah County 16.4%.

These days, the national unemployment rate is 3.6%, among the lowest in modern times, and Oklahoma sits at 3.0%. Sequoyah County was at 3.6% in January.

While historically low unemployment often means very few jobs available for those searching for employment, Mayor Ernie Martens says that’s not the case in Sallisaw.

“Anybody that wants a job right now can have one,” Martens proclaimed in a recent one-on-one interview.

“We’ve done a very, very good job in this city of attracting new businesses to town, which creates more jobs. It’s kind of a double-edged problem there. When you go up and down a street and you see a sign in front of every business in town that says ‘Now hiring’ — and we’ve got the call center, and we’ve got this one, and we’ve got Big Lots! coming, and we’ve got all this other stuff — we’re competing for the same workers in the city. And if we’re only starting them out at $12.70 to $13.50 an hour, we’re not going to be competitive and get the good workers.

“We’re getting top heavy, we’re putting too much money on the top-end salaries, and we’re not paying enough attention to the bottom, and bringing those bottom-end salaries up, because we’re not going to get good people. We’ve got five positions right now open, and we can’t get applicants for them because of the starting salary,” the mayor said.

“I’m trying to be the guy who looks out for these entry- level workers.”

That’s why attracting quality employees and offering competitive pay are uppermost in the minds of Martens, City Manager Keith Skelton and the Board of City Commissioners.

Analyzing salary, benefits

An ongoing and yearslong effort to be an employment leader is a priority for city leaders, and the pay scale topic returned to the forefront last month at the city commissioners meeting.

“At the March 13 Board of City Commissioners meeting, I had a discussion with the board on employee pay scale, compensation and benefit items,” Skelton recalled this week during a sit-down interview. “For fiscal year 2023, the city budgeted for 148 full-time employees, with a budget of $10.4 million [actually approaching $10.5 million] for salary and benefit items. Even with the salary and benefit packages now offered with the city, we still experienced turnover in positions due to low starting wages at some levels of our pay scale.

“Some of the things I’m going to visit about with council, of course we’re going to visit about the pay scales, our starting wage and so forth. Right now there’s a salary study going on in another public power community very similar to Sallisaw. I’m waiting to see what type of information I can get out of that to show where I’m at,” Skelton explained.

“Going forward, the Board of City Commissioners and city staff will need to review the salary and benefits of our organization and make changes as needed to continue to recruit quality employees. The city may choose to complete our own salary-benefit study to ensure that our workers are adequately compensated for the tasks they perform.”

Skelton said it’s been about 10 years since the city’s most recent salary-benefit study, and adjustments have been made. “We’ve upped our pay scale quite a bit since then, too, with cost-of-living increases and so forth. It definitely takes time, and then you’ve got to be prepared for what the survey says, too. If it says you’re 6% behind in the market, then the question is, do you take care of that all in one year, do you spread it out over two years?

“The key is to make sure our pay is adequate to recruit quality employees,” Skelton maintained.

Martens agrees. “I really think we’ve got to have better focus on getting those lower-level salaries up to get the better workers,” the mayor told the city commissioners at the March meeting.

Money in your pocket

While the point has been made that potential applicants should take into account the retirement and health insurance benefits the city offers, which are added incentives for employees, Martens and Skelton are pragmatic.

“People who are working-class folks in entry-level jobs, they’re not looking ahead for retirement and insurance. They’ve got to pay the bills every month. That’s the reality for people who are taking those entry-level jobs. They’ve got to buy the groceries and pay the electric bill and have a little money left at the end of the month,” Martens said.

“The more we pay them, the more we can attract, because we’re competing for the same employees. We’re competing in the [employee] pool with every other business in town that’s now hiring.”

Skelton points out that the city offers an excellent benefit package for its employees, but concurs with Martens.

“The city has always had a very good retirement system, and still does. In addition, the city has always maintained excellent health benefits for the employees. In the past, these benefits were enticements to recruit employees to the city. In the last several years, we have noticed a shift in what potential employees look for. It seems now pay is the main enticement, with benefits secondary.

“One of our concerns going forward on benefits, is that sustainable going forward? Of course we’ve had that discussion the past five or six years. How long is that going to be sustainable for us to continue to offer that benefit?”

But Skelton concedes that a benefit package is not as important to today’s entry-level employee.

“Some people look at [the starting wages] and don’t see the benefit part of it. But they see things like, ‘I can go to Braum’s and make $15 (an hour), or I can go to McDonald’s and make $15, or I can go to Walmart and make $17,” he said, but added that they may work only 32 hours a week.

“You work for us 25 years, you’re going to have a good retirement, you’re going to retire basically with almost the same amount that you’re making when you retire. And during that time, you’ll have good health insurance through us, and you’ll have good health insurance for your family as well. Plus you get your vacation, sick leave that we offer, longevity pay, things of that nature. Someone wants to go to school here, we’ll help pay their tuition. If you go to Braum’s or McDonald’s, you may not get all that stuff, and you may not get a full 40 hours a week, either.”

Recruiting quality employees

“In our recruitment the last year or two — since Covid hit; Covid just changed everything — that’s what we’ve seen,” Skelton said.

“And it’s not just us, either. I go to meetings across the state, and one of the meetings I went to about two weeks ago, people were talking about the issues they are having in recruiting quality people. Cities across the state are having the same issues. It’s a challenge all over the state right now to recruit the employees that are needed.

“Over the years, requirements placed on city governments and their operations dictate that you must have quality employees. Whether these positions require certificates of training, permits, CDL driver’s license or a college education, the city must recruit these employees and pay them accordingly,” Skelton said.

While attracting new businesses to town — which, in turn, creates more jobs — may be good for Sallisaw, such a boom puts the city in competition with other employers.

“If we’re going to find good, quality workers to keep,” Martens began, then focused on the challenges to be overcome. “It’s going to get worse with the VA, and when Big Lots! comes in, and the call center’s still hiring, they’re still needing more people, they’re growing. Then if we get one or two retail businesses in town, the problem’s just going to be exponential, and it’s going to get worse if we don’t figure out how to compete with those entry salaries that everybody else is doing.”

At many businesses, such as the call center, even at the entry level, employees can sit in an air-conditioned building, unlike many entry-level positions with the city which require manual labor during Oklahoma summers.

“There are lot of our jobs in town that are hard work. It’s hard, physical labor and out in the weather,” Martens pointed out. “Riding on the back of a garbage truck. Do you want to ride on the back of a garbage truck for $12 an hour?

“It’s my job to make it attractive for folks to want to work for the city. The only way we’re going to have good people in DiamondNet and anywhere and everywhere is if we can hire good people.

“The pool of workers we have is not just confined to the city limits. We can pull from Roland, Muldrow, Vian, Gore, we can pull all up and down I-40, but some folks don’t want to drive even to Sallisaw to work. And then when you got Muldrow and Roland, they’re trying to attract good city workers, too. Everybody’s wanting good city workers, even the small towns.”

There’s a growth spurt

Skelton agrees that Sallisaw’s growth is a blessing as well as a potential curse.

“This is all going to become very important,” the city manager says of what may be a limited employee pool, “because right now, we’re seeing a growth spurt. With the VA center coming in and some other things that’s possibly going to be announced soon, we’ve got to pretty good growth spurt going on. We’ve already got one housing addition going in, another one is probably getting close to going through the platted process, we’ve got the Highway 59 project fixing to kick off, so there’s a lot of stuff that’s going on in the community right now. Before long, the 308 exit will be completely redone. It’s stuff like that we’ve got to prepare for.

“But with that stuff comes going through the planning department, code enforcement, plat review, planning utilities, the infrastructure, stuff like that. That’s stuff you’ve got to do, and you’ve got to have the staff and the expertise to get through that.

“If SLPT [Global Pump Group] opened up a new line and they needed 10 employees, there’s a good chance we might lose five. There’s always a chance that might happen. You got to weigh the good with the bad. If I get a company that comes in that’s going to generate $300,000 in sales tax a year and I lose one employee, that’s still a plus for us. Hopefully that employee betters himself and goes on and has a nice career with that company.

“When you lose someone that’s got years of experience and are doing a great job for you and then they’re enticed to go someplace else or they retire, then those type of positions really hurt you,” Skelton said.

“For the last two years, we have had a 28% turnover rate, 17% in the last 12 months. It’s probably a little more than what we’ve experienced in the past. I think it’s just people and pay. Over the years, we’ve had people retire, and we’ve replaced them with a lot younger workers. So the younger workers are not as stable as far as staying, some move on to other things. For some, this is just a stepping stone to get to better things.

“One of the concerning points that I have is employees with 20 years of service or more, we only have 24. And we have 30 employees that fall into the category of 10 to 20 years of service. Everybody else is less than 10. That’s a pretty significant amount of our workforce. That’s two-thirds of our workforce with less than 10 years,” Skelton explained.

The city operates with an annual budget of $25.3 million. More than 40% of the budget is earmarked for salary and benefits.

“We have a big payroll. We have a lot of people that do a lot of different things. And you have to maintain that,” Martens pointed out, adding that about half of the city supervisors can retire in the next few years, which will result in a brain drain for the city and a loss of institutional knowledge.

Retaining quality employees

“I’ve got a good staff under me,” said Skelton, who has been with the city since 1994. “Most of them have been here, not as long as I have, but they’ve all been here 10 years-plus, my senior staff that I depend on. They know what they’re doing.

“I’ve got Keith Miller, he’s very knowledgeable in construction methods and easements, right of ways, code enforcement. Robin Haggard’s very good on the financial side, and she’s been involved a lot more the last couple of years on project tracking. It helps to have those people.”

Skelton pointed out that the city employs a wide variety of personnel to do many types of jobs — police officers, firefighters, water and wastewater plant operators, heavy equipment operators, customer service personnel, electric linemen and accountants, “anywhere from the blue-collar workers to the professional type, white-collar type workers. Many of these positions require certain certifications, extensive training, licenses or education in order to occupy these positions,” he said.

“So we want to make sure we keep good quality-type workers. It’s hard for us to find people who know how to operate dozers, backhoes, those kind of things. A lot of times, we’ll hire people and we train them on our stuff.

“The employees that’ve been here, they’ve moved up higher on the grade scale. The way our [pay] scale’s structured, you top out on your pay grade after eight years. Once you top out, about the eighth or ninth year, that’s when longevity starts kicking in, and that’s based on so many dollars per month for every month you’ve been here.

“One of the things I probably want to look at with the council this year is maybe adding two additional steps to our pay grade and make the top out a little bit larger. We can also adjust the percentage between each step as you move through the pay scale, or we may adjust the percentage going down, so there’s different ways we can do the pay scale. We just have to make sure it fits our goals for the future, and also the budget for it,” Skelton said.

“Anything we do will benefit current and future employees. That’s the stance we’ve taken on past job evaluation studies we’ve done, pay studies. We’ve always taken the stance that anything done will benefit all of our workforce.

“I think the point that employees should understand is whatever we do will benefit both the current and the future employees,” Skelton emphasized.