UNC System gives campus trustees new bonus pay structure to address employee turnover
The UNC System has new guidelines for bonuses for thousands of current and future employees, including all faculty.
The new regulations allow boards of trustees to approve non-base salary compensation for employees who do not have employment contracts. It gives universities a new tool to compete for top talent and incentivize current employees to stay.
Signing bonuses and retention bonuses will now be capped at $25,000 or 20% of the base salary for a new position or current employee. Performance bonuses are capped at $50,000 or 20% of the employee’s current base salary.
The bonus pay guidelines come as the system struggles to recruit and retain faculty and other critical campus staff. It follows a bonus structure set by the state for employees who are subject to the provisions of the State Human Resources Act of North Carolina.
“Every employer is in a challenging workforce environment trying to recruit and retain talent,” UNC System Chief Operating Officer Michael Vollmer said.
Why the new bonus structure was set
Earlier this year, the UNC System Board of Governors and office of state human resources recognized a need for bonuses to be able to compete for talent.
The state already had authorized recruitment and retention bonuses in June for those employees covered by the State Human Resources Act. This policy change essentially extends that same bonus framework to those workers who are exempt from that state law. All university faculty and most research, instructional and senior administrative positions are exempt.
A report to the board in April showed the system’s turnover rates increased significantly across the board starting in 2021 and have continued in that direction. The report noted the separations were due to voluntary job changes, early retirement and some working parents at least temporarily leaving the workforce given childcare challenges during the pandemic.
About 4,150 employees left the UNC System voluntarily in the first six months of fiscal year 2021/22. That is just under the average number of turnovers in the entire fiscal year over the past four years.
The systemwide annual turnover rate of 8.9% for all faculty and staff is slightly lower than the College and University Personnel Association median benchmark of 9.4%.
Appalachian State University, Elizabeth City State University, Fayetteville State University and Winston-Salem State University saw the highest rates of turnover among staff. North Carolina State University, UNC-Charlotte, UNC School of the Arts and UNC Wilmington saw increased turnover rates among faculty compared to previous years.
In May, the Board of Governors approved a resolution giving the system president more power to set those bonus pay guidelines and then delegate that authority to campus boards of trustees that administer the bonuses.
It was intended to address the recent employee turnover trends and labor market challenges brought on by the COVID-19 pandemic, such as the “Great Resignation.”
Historically, the non-salary compensation process for employees was ad hoc, Vollmer said. Bonuses were one-offs that were included as allowable salary increases with approval, Vollmer said.
“We felt like codifying that gave clear guidance and authority to put a tool in the BOT and campuses’ toolkit in order to recruit,” Vollmer said.
The system wanted to rely less on permanent, recurring base salary adjustments and use more flexible pay incentives that are based on real-time performance and can use non-recurring funding sources.
What UNC System employees does this apply to?
This bonus structure applies to all employees exempt from the State Human Resources Act, excluding chancellors and the president.
While they don’t make up the majority, there are more than 10,000 such current employees. They include all faculty and staff in instructional, research, information technology, athletics and public service positions.
Senior academic administrative officer positions, including vice chancellors, deans and provosts, are also included.
This won’t affect athletic coaches’ contracts since boards of trustees already have the authority to approve their contracts, which may include bonuses. It also doesn’t apply to UNC Health employees who fall under compensation policies governed by the UNC Health board. And performance bonuses for clinical faculty are exempt from this new policy.
Vollmer said this is not targeted at a specific department such as athletics or the medical school, for example. The system hopes it will tackle workforce challenges across the board from information technology to student support positions like financial aid officers to those in the back office that help the university run and keep students in the classroom.
This story was originally published September 9, 2022 at 2:42 PM with the headline "UNC System gives campus trustees new bonus pay structure to address employee turnover."
