A general review of our financial and social conditions takes place every five years: “the five-yearly review”, whose principles and procedures are described in Annex A1 of the Staff Rules and Regulations.

The purpose of the five-yearly review is to ensure that the financial and social conditions offered by the Organization allow it to recruit and retain from all its Member States staff members of the highest competence and integrity required for the execution of its mission.

The five-yearly review must include basic remuneration (the basic salaries of staff members, the stipends of fellows, and the subsistence allowances of associated members of the personnel) and may include any other financial or social conditions.


Start of the 2010 five-yearly review and data collection

As we wrote in Echo no. 80, CERN Council approved the document CERN/2862 for the 2010 five-yearly review (hereinafter 2010 5YR) at its meeting on 19th June 2009. This was the Management’s proposal which, apart from the compulsory part (basic salaries), retained only health insurance (CHIS) in the optional part. However, to meet the request of the Member States at TREF, the Director-General added the possibility, should it prove to be necessary, of reviewing the procedures in Annex A1 at the end of the 2010 5YR exercise.

For the subject of health insurance the CHISB, another SCC subgroup which supervises our health scheme, has dealth with the necessary actuarial studies and data collection (see Echo no. 102).

In what follows, we confine ourselves to the subject of salaries.

To make an objective examination of our financial conditions, a comparison with the outside world is necessary. A SCC subgroup made up of representatives from the three CERN activity sectors, the Staff Association, and HR Department has dealt with gathering and analysing the required information. For this, a certain number of benchmark jobs from administrative and technical careers were defined and, for each one, external experts (OECD/CCT) compared CERN salaries with those of the best employers in the hi-tech industry, in the local area (career paths AA to B), and in several European countries (career paths C to G).

In parallel, the CERN HR Department has carried out the necessary comparisons for the financial conditions of fellows and associated staff.


Results of the data collection

Firstly, we note that a comparison of the conditions offered to fellows at CERN and at DESY, EMBL, ESO, ESA and at research laboratories in the UE has shown that CERN remains an attractive employer.

Similarly, a comparative study has proven that the financial and social conditions offered by the Organization to associated members of the personnel allow it to attract the latter category to CERN’s research installations, despite the highest level of cost of living in the bordering areas of the Organization.

For staff members, we remind you that for career paths AA to B, the comparison is made with employers established in the bordering area of the Organization offering among the most competitive salaries. As far as career paths C to G are concerned, employers considered are those established in the Member States which, according to the information collected by the Organization for Economic Co-operation and Development (OECD) or, failing that, any other official source, offer the most competitive salaries. It should be noted that the comparisons are based on net salaries adjusted according to the purchasing power in the country in question (purchasing power parity).

In order to define the terms “among the most competitive” and “the most competitive”, we will introduce the notions of first quartile (Q1), median (Me), and third quartile (Q3), which correspond to the accumulated frequencies of 25%, 50%, and 75% respectively. We will take, for example, a sample of firms which we rank by increasing salary (fig. 1). The median (Me) corresponds to the salary point where half the firms in the sample offer a higher salary and the other half offers a lower salary. The 3rd quartile (Q3) corresponds to the salary point where a quarter of the firms offer a higher salary and three quarters of the firms offer a lower salary.
 

The term « among the most competitive” means around the 3rd quartile (Q3) and “the most competitive” refers to a significantly higher value than the 3rd quartile.


Results of the comparison of salary conditions in the local area

For the benchmark jobs in the administrative and technical areas for career paths AA, A and B, the comparison has shown that CERN salaries (the 100% line in fig. 2) are situated around the median of the salaries offered on the Swiss employment market (and are therefore lower than the “among the most competitive“ salaries.)


Fig. 2 : Salaries offered by the comparator firms in the local area normalized to CERN salaries.
Left-hand side: administrative activities.
Left-hand side: technical activities.
Left-hand column: single person.
Right-hand column: married person.


Results of the comparison of salary conditions in the international recruitment area

For their international comparisons, the SIO/IOS section of the OECD compared the salaries of a single person and of a married person with two children for the different benchmark jobs at CERN with those in the countries offering the most competitive conditions (Germany, United Kingdom, and Switzerland), plus one country chosen in different regions of Europe: (Norway, Spain, and the Czech Republic). All the graphs shown hereafter were produced by the OECD consultant.

The results for a single person in the administrative area are shown in fig. 3. We can see that, except for the benchmark jobs on the far left, the levels in Switzerland are some 30% higher than at CERN (if we take into account the family, the differences are even greater).



Fig. 3 : Salaries offered for administrative activities by the firms in the most competitive countries normalized to CERN salaries (line 100).
In yellow : the most competitive country.


The results for a single person in the technical area are shown in fig. 4. We can see that, except for the benchmark job on the far left, the levels in Switzerland are between 20% and 40% higher than at CERN (if we take into account the family, the differences are even greater).


Fig. 4 : Salaries offered for technical activities by the firms in the most competitive countries normalized to CERN salaries (line 100).
In yellow : the most competitive country.


Finally, for supervisory and managerial functions (group leader, project leader, department leader, and director) the conditions offered by the firms in the country offering the best conditions (three times Switzerland, once Spain and once the United Kingdom) are considerably higher (from 30% to 100%) than those offered at CERN (fig. 5).


Fig. 5 : Salaries offered for supervisory and managerial activities by the firms in the most competitive countries normalized to CERN salaries (line 100).
In yellow : the most competitive country.


An increase forever postponed

For the benchmark jobs considered, the comparison shows that CERN offers a comparable salary in certain cases, but more often than not a salary that is lower than that offered by the most competitive employers in the private sector. The effect is already significant for a single person, but further increases in the case of a family with two children.

According to the procedure for the five-yearly review, these results must serve as a guide for the Director-General when making his proposals and for CERN Council in December 2010 when they decide how to adjust the financial and social conditions of staff members. However, the more Council departs from the guide references, the more these differences must be justified.

Let us remember what happened at the past five-yearly reviews.

Since 1995, i.e. three five-yearly reviews ago, nothing has been done to reduce the salary differences observed between CERN and the comparators. In particular, with respect to 2005, the situation has deteriorated with substantially increased differences in places. This can no longer be allowed to continue. Today CERN is no longer able to attract the best candidates and will find it more and more difficult to retain and motivate its staff. Excellence has a price and the Organization must take immediate steps to stop this deterioration by increasing the salary grid from 2011.