Supporting Statement for the
Compensation and Salary Surveys
(FR 29a, b; OMB No. 7100-0290)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from the Office of Management and Budget (OMB), proposes to extend, without revision, the family of reports that include the Compensation and Salary Surveys (FR 29a,b; OMB No. 7100-0290). These surveys collect information on salaries, employee compensation policies, and other employee programs from employers that are considered competitors for Federal Reserve Board employees. The data from the surveys primarily are used to determine the appropriate salary structure and salary adjustments for Federal Reserve Board employees. The total annual burden for the FR 29a,b surveys is estimated to be 260 hours. A copy of the most recent annual survey is attached.
Background and Justification
The Federal Reserve Board implemented a market-sensitive salary structure in 1989, replacing one that paralleled the federal government’s salary structure. The Board implemented the new structure based on several factors, including turnover of key employees in important positions (especially economists, attorneys, and financial analysts), difficulty in hiring experienced professionals and top-level graduates, and low employee morale because of actual or perceived noncompetitive pay. The Federal Reserve met with the consulting firm of Coopers and Lybrand to identify key job families, select benchmark jobs, and draw the original panel for a salary survey.
In support of market-sensitive adjustments to the salary structure, the Federal Reserve sponsors an Annual Salary Survey (FR 29a). Between 1989 and 1992, the Federal Reserve conducted the survey, and the 1993 survey was assigned to a consultant. The consulting firm of Watson Wyatt has conducted the survey since 1994. The Federal Reserve uses the survey information as a basis for recommendations to the Board regarding proposed salary range adjustments and merit increases for Federal Reserve Board employees so that salary ranges are competitive with other organizations offering similar jobs. The Federal Reserve also uses (1) published data from consultants such as William M. Mercer, Inc. (Mercer) and Edward Perlin Associates to supplement its information concerning specific job families, (such as information technology jobs); (2) merit projection surveys conducted by consulting firms such as Hay Management Consults (Hay), Hewitt Associates, and Mercer; and (3) data collected by Reserve Banks and Federal Institutions Reform, Recovery and Enforcement Act (FIRREA) agencies.
In order to fill unanticipated staffing needs and to assist in human resources policy planning, the Federal Reserve conducts more limited surveys (FR 29b) on an ad hoc basis. These surveys gather information that is needed between annual salary surveys or information on topics that are not easily incorporated into the annual survey. The surveys have proven to be effective instruments for the timely collection of such information.
In 2004, the annual Compensation Trend Survey (FR 29c) was discontinued. Hay, an international consulting firm, conducted this survey on behalf of the Federal Reserve since 1991. The FR 29c survey data was primarily used by the Federal Reserve Board to support the Federal Reserve System in their annual salary review and adjustments of the salary structure for Reserve Bank employees. However, since 2001, the Federal Reserve has relied on data published in other national compensation surveys.
Several human resources consulting firms produce data on salaries and compensation trends; however, these data are less detailed than the information that the Federal Reserve collects. As noted above, this published information is used to supplement the FR 29 data, which focus on jobs comparable to those of Federal Reserve employees.
Description of Information Collection
The Federal Reserve sponsors surveys to aid in the annual adjustment of the salary structure. The Federal Reserve Board conducts other surveys on special topics on an ad hoc basis. These surveys conform to the Federal Reserve System’s strict guidelines for compensation that govern the type of information gathered and how the information is gathered and used. The consultant that conducts the annual survey is selected competitively for a two-year contract.
Annual Salary Survey (FR 29a)
The Annual Salary Survey (FR 29a)1 requests information in five sections: general information, organization data, salary policies and practices, benefits programs, and salary data. The information includes salary ranges, average salaries paid, merit increases, average work weeks (hours worked), benefit programs, and bonuses. These categories are typical of third-party salary surveys. The survey requests data on fifty-seven benchmark jobs (Federal Reserve jobs comparable to jobs filled by respondents). Of these jobs, forty-four are exempt from the Fair Labor Standards Act overtime requirements, and thirteen are nonexempt. The benchmark jobs cover the work performed in every division at the Federal Reserve Board, by position and grade level. Each year, Watson Wyatt consults with the Federal Reserve Board to update the list of benchmark jobs and the sample of respondents.
Watson Wyatt distributes approximately ninety survey questionnaires, annually, to a broad cross section of employers within the New York and Washington, DC corridor. On average, approximately thirty-five responses are returned and included in the master survey database. All respondents receive a complimentary copy of the completed report.
Ad hoc surveys (FR 29b)
In addition to the annual surveys, the Federal Reserve Board conducts other surveys (FR 29b) during the year as needed to collect information on specific salary and non-salary issues that affect Federal Reserve Board employees. Recent examples of salary topics included salaries paid to employees in economist and attorney positions to aid in recruiting and retention issues. Recent examples of non-salary topics included workforce planning, telecommuting, and leave policy.
The process of designing and conducting these ad hoc surveys is informal. The Federal Reserve Board draws on its good working relationships with the respondents to the annual salary survey and conducts the ad hoc surveys by phone and facsimile from a subset of these respondents. The Federal Reserve Board cannot anticipate what information will be needed, and the need for the information is usually very time critical. The Federal Reserve Board seeks general approval to conduct the ad hoc surveys as needed and anticipates that it will conduct five ad hoc surveys per year, contacting about ten respondents per survey.
Time Schedule for Information Collection
The annual salary survey questionnaire, which collects data as of June 1, is distributed in mid-June of each year. The target date for the return of questionnaires to Watson Wyatt is early July; the Federal Reserve Board and Watson Wyatt make follow-up calls to potential participants through mid-July to encourage them to respond. Survey results are verified and compiled during July and August, and the final report is mailed to participants in September.
The Federal Reserve Board conducts ad hoc surveys throughout the year when the need arises. Owing to the informal nature of these surveys, the good working relationships with many of the respondents, the small number of respondents per survey, and the use of phone and facsimile instead of mailing paper questionnaires, the Federal Reserve Board typically needs only a few days to design the survey and collect the responses.
This collection of information contains no questions of a sensitive nature, as defined by OMB guidelines.
Consultation Outside the Agency
The Federal Reserve and Watson Wyatt work together to review and make minor changes to the Annual Salary Survey instrument. On September 21, 2007, the Federal Reserve published a notice in the Federal Register (72 FR 54041) requesting public comment for sixty days on the extension, without revision, of the Compensation and Salary Surveys. The comment period for this notice expired on November 20, 2007. The Federal Reserve received no comments. On December 3, 2007, the Federal Reserve published a final notice in the Federal Register (72 FR 67938).
Legal Status
The Legal Division has determined that sections 10(4) and 11(1) of the Federal Reserve Act, (12 U.S.C. 244 and 248(1)), respectively, authorize the Federal Reserve Board to collect salary information and that the information collection is voluntary. These statutory provisions grant the Federal Reserve Board independence to determine its employees' salaries and compensation. Individual respondent data are regarded as confidential under the Freedom of Information Act (FOIA) (5 U.S.C 552 (b)(4) and (b)(6)). Any aggregate reports produced are not subject to FOIA exemptions.
Estimate of Respondent Burden
The total annual respondent burden is estimated to be 260 hours, as shown in the table below. Since the surveys are voluntary, it is not possible to predict exactly how many surveys will be returned in a given year. The estimated number of respondents is based on recent response rates. In recent years the Federal Reserve Board has conducted, on average, five ad hoc surveys with an average of ten respondents per survey. The total burden for the FR 29a,b represents less than 1 percent of total Federal Reserve System annual burden.
Surveys |
Estimated number of respondents |
Annual frequency |
Estimated average hours per response |
Estimated annual burden hours |
FR 29a Annual Salary |
35 |
1 |
6 |
210 |
FR 29b Ad hoc |
10 |
5 |
1 |
50 |
Total |
45 |
|
|
260 |
The total estimated annual reporting cost to the public for these reporting forms is $14,300.2
Estimate of Cost to the Federal Reserve System
The total annual cost to the Federal Reserve System for the surveys is estimated to be $50,000 for the Annual Salary Survey and $3,000 for the ad hoc surveys. The Federal Reserve Board incurs cost in terms of staff time for development and analysis, and contractual services to the vender to conduct the annual survey.
1 Based on recent market trends of the Board’s competitors, salary surveys may be conducted every two years.
2 Total cost to the public was estimated using the following formula. Percent of staff time, multiplied by current and proposed annual burden hours, multiplied by hourly rate: 100% - Managerial or Technical @ $55.00 hourly rate. The hourly rate estimate is an average using data from the Bureau of Labor and Statistics, Occupational Employment and Wages, news release.
| File Type | application/msword |
| File Title | Supporting Statement for the |
| Author | m1swf99 |
| Last Modified By | m1ldl00 |
| File Modified | 2007-12-05 |
| File Created | 2007-09-27 |