Ontario Municipal Human Resources Association

As Manager of Benefits & Compensation at the City of Waterloo, I am pleased to share insights on salary benchmarking and benefits planning with fellow OMHRA members. In today’s competitive labour market, Ontario municipalities face ongoing challenges in attracting and retaining talent while maintaining fiscal responsibility. Effective strategies in these areas are essential for supporting high-performing teams that deliver quality public services.

The Foundation: Internal Equity and External Competitiveness

Successful compensation programs rest on two (2) pillars: internal equity and external market competitiveness. Internal equity ensures fair pay for work of equal value, addressing systemic issues like gender-based discrimination through tools such as gender-neutral job evaluation systems compliant with Ontario’s Pay Equity Act. At the City of Waterloo, we use such a system to evaluate roles based on skill, effort, responsibility and working conditions, promoting transparency and morale.

External benchmarking compares our compensation to peer organizations. For example, our recently revised Compensation and Benefits Policy commits the City to conducting external market surveys every two (2) to three (3) years (or more frequently as needed). We outline our target percentile of our approved market comparator group – typically similar-sized municipalities in the Region of Waterloo and broader Ontario, selected for factors like population, service scope, expenditures and geographic proximity. Adjustments require Council approval and consider the City’s financial position.

This structured approach, outlined in our Policy, balances competitiveness with sustainability. It supports objectives including talent attraction/retention, employee wellness and alignment with Council’s Strategic Plan. For unionized groups, collective bargaining governs specifics, while non-union and management structures follow policy guidelines with oversight from our Corporate Management Team.

Benefits Planning: Beyond Base Pay

Benefits planning complements salary strategies by supporting holistic well-being. The City offers competitive group benefits, participation in the OMERS defined benefit pension plan (mandatory for full-time, elective for non-full-time employees since 2023), health/dental coverage, sick leave, vacation and more. The City’s Policy emphasizes providing reasonable, competitive plans within funding limits, with options for regular part-time staff as well.

Recent years have seen emphasis on total rewards amid inflation, workforce aging and post-pandemic expectations. Municipalities should regularly review benefit utilization, carrier performance and emerging needs like mental health supports or flexible work. Integrating benefits communication into onboarding and annual reviews enhances perceived value and engagement.

Practical Implementation Tips for OMHRA Colleagues

1. Establish Clear Policies: Formalize principles in a corporate policy for consistency and defensibility. Include definitions for elements such as market adjustments, red-circling and step progression to guide administration and remove ambiguity in decision making.
2. Benchmark Regularly but Strategically: Identify key benchmark positions and use reliable data sources and peer comparators. For example, many Ontario municipalities leverage reputable external data sources such as Mercer Canada’s Ontario Municipal Compensation Survey which provides robust, peer-comparable data across hundreds of benchmark positions. Also ensure to review comparator groups periodically (e.g. every 10 years) to avoid outliers. Tie results to budget planning.
3. Mitigate Financial and reputational risks: Pay equity compliance remains a critical component of responsible compensation management under Ontario’s Pay Equity Act. Municipalities must not only achieve but continuously maintain pay equity between male- and female-dominated job classes. For example, the recent Niagara Health settlement, which resulted in a $20 million payout for retroactive adjustments affecting thousands of workers, underscores the significant financial implications of unresolved gaps. Having a gender-neutral job evaluation system and conducting regular market reviews, support ongoing compliance while promoting fairness and reducing potential liabilities.
4. Incorporate Broader Factors: Consider living wages, cost-of-living adjustments (COLA), recruitment/retention pressures and equity goals. For non-union represented staff, align COLA thoughtfully.
5. Council and Stakeholder Engagement: Secure buy-in through transparent reporting. In Waterloo, Council approves comparator groups and major adjustments, linking compensation to strategic priorities like service excellence and fiscal prudence.
6. Monitor and Adapt: Track metrics like turnover, time-to-hire and employee feedback. Use job evaluation for role changes and market adjustments for targeted issues. Plan benefits renewals proactively.

Conclusion

Salary benchmarking and benefits planning are not merely administrative tasks; they are strategic imperatives for building resilient municipal workforces. By prioritizing fairness, competitiveness and well-being, we as public servants can better serve our communities.

Written by: Michael Burzynski, OMHRA member and Manager of Benefits & Compensation at the City of Waterloo