Pay gap between feds, contractors widens

Alan Chvotkin, Executive Vice President, Professional Services Council

wfedstaff | April 17, 2015 3:33 pm

By Jack Moore
Federal News Radio

The gap between government and contractor compensation has continued to widen, according to a recent survey from the Human Resource Association of the National Capital Area and the Professional Services Council, an industry association that represents government contractors.

“Pay for government contractor employees is still higher than the pay for federal employees,” said Alan Chvotkin, executive vice president and general counsel of the PSC, in an interview on In Depth with Francis Rose. “And that gap is getting a little wider.”

In the latest survey, which examined and aggregated compensation data for some 450 different types of jobs:

  • Overall, contractor pay was 7.3 percent above that earned by federal employees
  • Median contractor pay compared to the previous year increased by 2.1 percent
  • Median pay in the federal government remained essentially flat compared to the previous year
  • Contractor “executive” pay levels were, on average, 69 percent higher than federal employee counterparts

Though the aggregate is skewed toward higher contractor compensation, some individual jobs pay more in government than in the private sector, Chvotkin said.

For example, the median salary for a general human resources official in government is $109,000. The median contractor salary for a similar position is $83,400.

But on the other hand, the median salary for a government chief technology officer at $129,700 is quickly outpaced by the $230,000 median pay earned by contracting CTOs.

“So, job by job, position by position, level by level, it varies all over the place,” Chvotkin said.

Chvotkin chalked up the pay gap to a number of factors, such as pay freezes for federal employees and a cap on Senior Executive Service compensation .

Contractors, especially in technology fields, are also better able and willing to attract — and pay — top talent, he said.

But Chvotkin said the competition for talent in both government and contracting could become more challenging, in part because of the “salary compression” in the government space.