Governor delays salary study as staffing shortages continue to hobble Alaska government

Dec. 28—Challenges in recruitment and retention of state employees continue to bog down state services, according to budget documents released earlier this month.

In recent months, the Fairbanks Pioneer Home, a public assisted-living facility, has reduced its capacity because of a shortage of staff. The Alaska Psychiatric Institute, the only public inpatient mental health facility in the state, relies on contracted staff, rather than employees, to provide care. The Division of Juvenile Justice has closed its Fairbanks facility due to staffing shortages.

The budget documents, prepared by the various departments in Alaska’s state government, lay out the departments’ current challenges and those they expect in the coming fiscal year. Almost every department lists staffing shortages or recruitment and retention as one of their top challenges or priorities.

Recent data shows that vacancies in state government have remained persistently high. Last December, 14.8% of full-time state positions were vacant. Last month, 13.9% of full-time positions in the state’s payroll system were vacant, according to information collected by Gov. Mike Dunleavy’s Office of Budget and Management. More than 23% of part-time permanent positions were vacant, and more than 60% non-permanent positions — which are a minority of statewide jobs — were vacant. Overall, 16% of state jobs were unfilled as of Nov. 15.

Departments report that the vacancies have affected services ranging from fisheries monitoring to payroll processing to services for mentally ill Alaskans. Even as some state offices have added new positions to target recruitment, launched new talent acquisition programs and offered sign-on bonuses, keeping key positions filled remains a challenge.

Amid challenges in recruitment and retention of state employees, lawmakers appropriated funds in 2023 for a salary survey to review whether the state was adequately compensating its workers. But the Dunleavy administration has delayed the release of the study, citing data gaps and missing information in the preliminary report.

The study was supposed to be completed in June, but the administration has asked for the study report to be delayed until March due to what the department has said was missing data on salary increases approved by lawmakers and through collective bargaining agreements with public employee unions.

“As we reviewed drafts of the study, we identified the need to gather additional data and requested the contractor solicit salary data from additional peer/comparable jurisdictions,” said Rachel Bylsma, Dunleavy’s deputy chief of staff, in a letter to department heads sent earlier this month.

“Potential changes to the State’s classification and pay plans informed by the final study report could substantially impact the State’s budget, and additional due diligence is necessary, especially as we look at the State’s revenue projections,” Bylsma wrote.

Dunleavy earlier this month proposed a budget plan that did not include any changes to the state’s pay structure.

Lawmakers have increasingly raised alarms about the delay in releasing the salary information, which could mean that the study’s conclusions will not be incorporated in the coming budget cycle.

Sen. Bill Wielechowski, an Anchorage Democrat, sent a letter earlier this week to the Department of Administration asking for the preliminary results of the survey to be released.

“The information gleaned from this study will be critical to the Legislature in addressing the many vacancies that exist in state government,” Wielechowski wrote, asking the department to “prioritize the immediate release” of the study. Wielechowski said Friday that he had not received a response from the department.

Anchorage Republican Sen. Cathy Giessel, who earlier this year championed an effort to address the state’s recruitment issues by overhauling public pension options, said she was concerned over the delay in releasing the study results “in light of the large number of vacancies in state government and local government.”

“I think there’s suspicion that the salaries and wages are so much lower than the private sector that it is part of the recruitment and retention problem. So it is odd that no information has been released,” Giessel said.

At least one department confirmed the suspicion that other employers pay more than Alaska in its budget document. According to the Alaska Department of Fish and Game, federal agencies currently pay 37% more than the state for some equivalent positions, including biologists and biometricians. The gap between Alaska’s compensation structure and that of the federal government has “widened in recent years,” department officials said.

Earlier this month, Dunleavy named recruitment and retention as one of his office’s key challenges, alongside diversifying and growing the state’s economy; improving food security; making housing, food and energy more affordable; and maintaining a balanced budget. Recent data showed that the governor’s office had the highest vacancy rate of any state department in November. More than one in every four funded positions was not filled, with a vacancy rate of nearly 28%.

Spokespeople from the governor’s office did not respond to questions about Dunleavy’s plans to address the state’s recruitment and retention challenges, or about the reasons for the high rate of empty positions in the governor’s office.

Numerous state departments — including the departments of Administration, Corrections, Fish and Game, Environmental Conservation, Family and Community Services, Health, Law, Natural Resources, Public Safety, and Transportation and Public Facilities — cited recruitment and retention or staffing as their top challenge or one of their top challenges heading into the new year in their budget documents.

The Department of Administration is “struggling to fill both entry-level positions and professional positions. Positions can sit vacant for long periods of time with work shifted to current employees, resulting in significant amounts of overtime, job dissatisfaction, and retention challenges,” department staff wrote in their budget proposal for the coming fiscal year.

Recruitment and retention challenges in the Department of Administration have downstream effects in every other section of state government, by reducing the efficiency of payroll services, which are handled by the department.

“Payroll Services was one of the sections hit hardest by challenges related to recruitment and retention. The section has had to maximize overtime and utilize non-permanent positions to continue timely delivery of pay to State employees,” department staff wrote.

The Department of Administration also oversees a process known as classification studies, which is used when the state seeks to change the pay structure for a given position. Recruitment and retention challenges have led to an increase in the number of classification studies. Those studies currently take “between two and three years to complete,” the department stated.

The Department of Family and Community Services also listed recruitment and retention as its top challenge, saying it is “greatly impacted” by staffing shortages.

“While the department’s initial responses to these challenges have demonstrated success, there is still more work to be done to address this issue,” the department stated.

In the Department of Health, employee departures are affecting the Division of Public Health’s ability to “meet industry and national standards,” including training providers on new clinical advancements and implementing national emergency medical services standards.

In the Department of Law, less than half of attorneys have held their positions for more than four years.

The Department of Natural Resources also listed staffing levels as its top challenge, stating that “difficult headwinds in the recruitment and retention of staff” have reduced the department’s ability to keep pace “with growth in resource sector activities and major project developments.”

The DNR Division of Forestry and Fire Protection also states that challenges in recruiting firefighters have reduced the state’s ability to “handle a moderate fire load without having to order non-Alaskan firefighting resources.”

The Department of Public Safety stated that statewide hiring challenges have “significantly impacted” the department’s ability to recruit and retain essential personnel. The Department of Public Safety added a new position of “trooper recruiter” and created the “recruitment liaison officer program.” The department processed 1,091 trooper applications, resulting in 29 hires during the 2024 fiscal year. Still, troopers reported that “persistent staffing shortages” affected their ability to meet minimum service levels. As of November, 17% of the department’s full-time positions were unfilled.

The state last conducted a salary study in 2009, when an outside contractor found that the state “is offering salaries and benefits that are within an appropriate competitive range in relation to other employers that are in direct competition for the employees required to deliver state services.”

Whether or not the salary study is released in time to be taken into account in the coming legislative session, addressing recruitment and retention is set to figure prominently into conversations among lawmakers in the coming year. The bipartisan coalitions in the House and Senate have both identified the state’s retirement benefits as a key area for potential overhaul in the coming legislative session.

Daily News reporter Sean Maguire contributed to this report.

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