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Business Case for Additional Increments for FI Group
In order to achieve a new collective agreement, the members of the FI Group require the inclusion of the following financial provisions in the agreement presently under negotiation:
- For each of the FI-1 and FI-2, one increment in the first year of the collective agreement, and a further increment in the second year of the collective agreement, said increments being at the top end;
- One increment for each of the FI-3 and FI-4, in the first year of the collective agreement, such increments being at the top end;
- That for each new increment, the corresponding increment be dropped from the bottom end. All increments will be applied in advance of calculating the percent economic increases;
- A three year collective agreement with annual percent increases of 2.5, 2.5 and 2.5%; and
- 50% of the Comptrollership Risk Allowance claimed in the Association's original proposal.
These demands are supported by the following data and information.
Internal Relativity
The FI group has fallen behind other comparable groups such as the Auditors. We have prepared graphs comparing the FI group to other groups including the Commerce Officers (CO), Economists and Social Sciences (ES), Personnel Administration (PE), Computer Systems (CS), and Auditors (AU). Our comparisons indicate that the FI group is at the low end of the salary scale both in absolute terms and in percentage increases from 1986 to 2003.
The Employer claimed in its 2002 arbitration brief that "comparisons of increases with the Auditing Group, which is probably the most natural internal comparator for the Financial Management Group, show that the compound increases received since the return to bargaining in 1997 for the two groups are virtually identical." Our graphs and charts show that the auditors have received significantly higher increases at the FI-1 and FI-2 levels. Furthermore, the auditors are significantly better paid at all levels ranging from 27.6% at the FI-1 to 9.7% at the FI-4 level.
The auditors, commerce officers and purchasing officers all received an additional increment at all levels in their last contract.
Another concern is that the FI-1 starting salary of $41,854 is below the top CR-5 salary of $44,210 in 2003. The first two increment levels of the FI-1 level should be removed so that a FI-1 is not paid less than a CR-5.
The Employer admitted it has provided additional increments to other groups in its 2002 arbitration brief. "The Employer acknowledges that since the resumption of collective bargaining in 1997, salary range restructures and additional allowances have been negotiated, or granted through pay equity settlements and awards for a significant number of occupational groups."
External Relativity
The Hay Group, an internationally recognized HR consulting group, indicated that the Financial Management Group as a whole, across all classification levels, trailed the national market by an average of 16% in 2006. They also found that the higher the FI classification level, the greater the proportion by which the group trailed the market.
The Society of Management Accountants of Ontario 2002 survey demonstrated that CMAs employed in government are paid $9,000 below the average median salary for all business sectors.
According to the CA Profession Compensation Survey of 2005, the median compensation for a Canadian CA was $110,000 and the average $164,396. The compensation in the public sector was far below that of industry, but even below the not-for-profit sector. It would be difficult to understand why a CA would consider working in the public service given the salaries in the private sector.
A review of the Job Opportunities in the Public Service also indicates that the FIs in the public service are usually paid less than their counterparts in agencies and crown corporations. For example, FI-1s and FI-2s are paid 4% more at the Canada Revenue Agency than what they are paid in the public service. For example a FI-1 at CRA was paid up to $59,855 in 2003 vs. a maximum of $57,561 in the public service. A FI-2 at CRA was paid up to $70,546 in 2003 vs. a maximum of $67,757 in the public service.
Parks Canada recently advertised a FI-4 Chief of Accounting Operations with a salary range up to $96,266 annually compared to the $91,124 available in the public service. Parks Canada advertised for a FI-3 Manager of Finance and Administration with a salary range up to $86,073 compared to $81,475 in the public service. The Library of Parliament advertised for a FI-2 Senior Officer, Accounting Operations with a salary range up to $72,667 compared to $67,757 in the public service.
The Employer has admitted that the salaries in the FI group are not competitive in its 2002 arbitration brief by stating "While comparisons at the FI 3 and FI 4 levels do indicate that the Public Service salary levels are generally below those in the market place..."
Community Demographics
The Employer claims that the FI group is a healthy group with no retention or recruitment issues. While the numbers of FIs have been increasing recently, the community faces a number of serious challenges. According to the statistics provided by the Employer, the Financial Management Group had 2,898 members as of March 31, 2004. 1293 of these members or 45% have 6 years or less years of service. The high level of mobility has reduced the level of corporate knowledge.
The following are findings of the 2003 demographic survey conducted by TBS of members of the Financial Management Community (1608 FIs responded):
"From an age perspective, the distribution of FIs is fairly even across the age groups. Moreover, there is a ten-year average age gap between the FI-1s and FI-4s. This may be accounted for by the rapid mobility and promotions as a result of attrition."
"Three of four (76%) FIs overall have been at the same level for less than five years. This includes four of ten (40%) who have been at the same level for less than to two years. This constitutes evidence of significant mobility."
"A total of 466 FIs indicated that they plan to leave the Financial Management Community in the next five years for reasons other than retirement. The incidence of departures ranges from 25% to 32% of employees from all levels." One of the recommendations in the report was for "ongoing learning and challenging assignments to build capacity of employees and retain staff."
The respondents who indicated they were going to leave the community were asked to provide circumstances where they would remain in the community. One of the basic responses was that there is a perception that the financial/accounting skills of experienced FIs are insufficiently compensated compared with what is paid out to equivalent professionals by the private sector.
The Association contends that in order for departments to retain their FIs, they are being promoted more quickly than in the past and a number of positions reclassified in order to give incumbents pay increases. There is a high demand for experienced financial officers leading to increased mobility in the group. Departments have increased the number of contracts for financial services since departments must recruit externally to fill all of their vacant positions.
A review of the growth of the Financial Management Group using official statistics provided by the Employer indicates that the group grew from 2,404 in June 2001 to 2,847 in May 2004 for a growth rate of 18.4%. However, the number of FI-4s increased from 144 to 203 for a growth rate of 41%. The number of FI-3s increased from 556 to 720 for a growth rate of 29.5%. Therefore, it is obvious that the departments are creating more FI-3 and FI-4 positions to address compensation issues in the community.
Office of the Auditor General of Canada comments on Financial Management Community
The OAG's October 2000 report on "Assessment of Financial Management Capabilities in Departments" illustrates staffing and recruitment challenges they observed. The following are most relevant:
"13.57 Departments also need to be able to attract and retain competent financial management staff. In each of the departments included in our audit, financial managers commented on the difficulties that they have experienced in this area. Managers noted high turnover rates of approximately 30 percent and a difficulty in staffing vacant positions. Although the departments were able to provide anecdotal reasons for these difficulties, none had analyzed in a systemic manner why they were occurring. Departments will have to do this analysis as a first step toward identifying the underlying causes of these staffing problems."
"13.58 We also noted that, through the FORD program of the Treasury Board Secretariat, departments have been able to recruit recent university graduates into the financial community of the federal government. While departments expressed satisfaction with the recruits obtained through this program, they have concerns about their inability to retain the recruits over the long term. Departments have not systematically tracked the reasons for the high rate of turnover."
"13.59 Departments and the Treasury Board Secretariat should develop strategies and plans to ensure that the government can attract and retain financial staff with the appropriate skills, knowledge and experience needed to carry out their responsibilities. Departments should assess their current capabilities and develop a strategy for closing any gaps between the capabilities required and those they presently have."
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