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McAllen city employees will receive a nice windfall just in time for Thanksgiving after the city commission unanimously approved a longevity pay bump during a meeting Tuesday.
Non-civil service city employees will first receive the longevity pay as a lump sum later this fall, and again each year thereafter.
“It would be based on the number of years as of Oct. 31 each year and would be paid in a lump sum the (first) pay period in November,” Christina Flores, director of the city’s human resources department, explained during Tuesday’s city commission workshop.
Staffers will get an additional $175 per year of continuous full-time service.
The incentive will max out at $4,000 per year for employees with 22 or more years of full-time service, according to a copy of the longevity pay schedule obtained by The Monitor.
Officials were spurred to look into the idea of longevity pay after noticing an uptick in staff turnover since the COVID-19 pandemic.
“Based on some of the changes that we made back in 2019 and 2020, we saw a decline in the turnover here at the city, but it has been creeping up and is just under 20% it looks like so far this year,” McAllen Assistant City Manager Jeff Johnston said.
IDENTIFYING PATTERNS
In 2018, McAllen experienced a turnover rate of 15.5% — a figure that had climbed from a low of 11% in 2016.
As a result, McAllen turned to data from the exit interviews of former staffers in order to gain insight into why people were leaving.
That data showed that departing staffers had rated McAllen’s holiday, vacation, sick leave and “other” benefits as “poor.”
To combat those low ratings, the city implemented changes, which paid off. Attrition fell from a pre-pandemic high of 15.5% in 2018 to 12.2% in 2020, the first full year of COVID-19.
By that point, the ratings for holiday and sick leave had risen to “fair” while the other categories remained at “poor.”
But over the last year, departing staffers began to downgrade their rating for another metric — how well McAllen pays its employees. The rating fell from “fair” to “poor.”
That post-pandemic dissatisfaction led to a 17.2% attrition rate in 2022, according to data presented to the city commission.
Again, city leaders turned to exit interviews to figure out why.
BY THE NUMBERS
The data show that, at 90%, full-timers make up the majority of the attrition.
In 2022, McAllen lost 290 full-time employees and 34 part-timers to resignations, retirements or terminations.
The city’s total workforce, which includes those who work at city hall, but also at places like the international bridges, airport, convention center and library, numbered at 1,882.
The city’s largest department — the police department — is also the one that saw the most people leave.
Last year 57 people left, though the data doesn’t indicate how many were sworn officers versus support staff.
Nonetheless, those 57 people accounted for 14% of the police department’s 405 total employees.
The city’s second largest department, the fire department, lost 11 of its 199 employees. But again, that figure doesn’t indicate how many were firefighters or support staff.
As civil service employees, neither police officers nor firefighters qualify for the newly approved longevity pay since their compensation is determined via a collective bargaining process.
However, other departments took big staffing hits, too.
McAllen’s next two largest departments — the McAllen Public Utility and Public Works — lost 35 and 18 employees, respectively.
For the MPU, that turnover was 25% of its 140-person workforce.
McAllen’s public library system also lost a quarter of its workforce when 22 of its 85 employees left the city in 2022.
DEMOGRAPHICS
City administrators drilled further down into the exit interview data to get a clearer picture of who chose to leave.
They found that the largest demographic were people with the least amount of seniority.
Nearly half of the turnover — 47% — came from people with two years or less on the job. The next largest group was people who had worked for McAllen for two to five years.
And it was that latter group that “hurts” more, explained the HR director.
“We’ve done some investing in the employee groups, right, and so when they leave, they … take with them that kind of training and investment that we’ve made in them,” Flores said.
Millennials, aged 25-40, accounted for more than half of the turnover at 51%, according to the data.
Gen Xers, aged 41-56, were the next largest group at 23%, while the city’s youngest employees, Gen Z, accounted for 14% of attrition.
While people from all three groups cited better opportunities or “new job aligns with personal goals or education” as the main reason for their departure, a significant number of Millennials and Gen Xers cited issues with inadequate pay or advancement opportunities as their primary reason for leaving.
Just 10% of the people who left did so due to retirement, including 22 of the 39 Baby Boomers who departed the city.
THE COST
It will cost the city of McAllen just under $2.2 million to implement the longevity pay later this year.
That includes approximately $423,000 that will be needed to fund such longevity pay for public utility staffers, as well, Flores said.
Though the total figure may seem like a lot, McAllen City Manager Roel “Roy” Rodriguez reminded the commission that it’s less than the price of a typical 3% cost of living adjustment, or COLA.
“We try to keep budgets from increasing more than three-and-a-half percent … per year on a year-to-year basis,” Rodriguez said, adding that payroll makes up 85% of general fund expenditures.
“And so that represents about 1.67%. If you were giving COLA instead of longevity, that’s like a raise of 1.67% to employees,” he said.
And though the commission unanimously approved the longevity pay, the compensation question isn’t over.
The city plans to conduct a salary study during the 2024-25 fiscal year, Johnston, the assistant city manager, said.
