The best employees of Alaska Permanent Fund Corp. are among the highest paid civil servants in Alaska, but with wages rising nationwide and employers competing for skilled labor, even the Permanent Fund is struggling to keep employees from leaving.
Nine of the company’s 66 employees quit this year, including the manager of the company’s highest-earning investments and the entire three-person team tasked with completing the deals. Seven other positions are new and are expected to be difficult to fill.
The APFC’s struggles are shared across the state government, according to a May 31 vacancy report released in response to a public records request.
Among the announcements:
- 30% of the 196 positions in charge of alimony are vacant;
- 16% of the Department of Motor Vehicles’ 142 jobs are vacant;
- The state’s commercial fishing division is missing 21 percent of its 666 employees; and
- Nearly 60% of the state’s 1,275 ferry system jobs are vacant.
Some vacancies are inevitable as employees come and go, but the Office of Management and Budget expects vacancy rates to remain between 0 and 7 percent, depending on company size. a division or an office.
Across all industries at present, 19.3% of the state’s 17,006 jobs, or nearly one in five, are vacant.
Those vacancies have canceled ferries, slowed state services and created concerns within the Permanent Fund Corp.
Since 2018, an annual transfer from the Permanent Fund to the State Treasury represents at least half of the annual state revenue.
Employees of Permanent Fund Corp. are responsible for investing the fund in such a way that transfers continue without harming the long-term value of the fund.
“When you have gaps and staffing issues in that team, it can have a financial impact on the fund,” acting executive director Valerie Mertz said earlier this month, referring to the departure of the three members of the team. firm’s investment operations team.
She said the company will have to temporarily outsource the work.
“It will be more expensive, but we really don’t have a choice at this point,” Mertz said.
At another state-owned company, the Alaska Industrial Development and Export Authority, talks about outsourcing led a board member to briefly offer to resign.
AIDEA is the state’s investment bank, which invests public funds in development projects throughout Alaska, but as of early June, 20 of its 83 positions were vacant.
“I don’t think we are an anomaly,” said AIDEA Executive Director Alan Weitzner.
AIDEA is developing the Ambler Highway, a 211-mile gravel road to reach mining projects in Northwest Alaska. Due to staffing issues, AIDEA has outsourced some of the work that it would normally have to handle in-house.
During a discussion in late May about staffing issues, AIDEA Board Chairman Dana Pruhs asked if more positions should be outsourced. Later in the meeting, Pruhs apologized for inadvertently insulting current staff and offered to leave the board. He remains a member.
AIDEA and other state agencies have tried to recruit aggressively through social media, job fairs, recruiting firms and more.
During the July 4 parade in Juneau, a truck carried a banner promising a $10,000 signing bonus for new employees of the Alaska Department of Corrections.
The Alaska Marine Highway System is offering a $5,000 bonus to new Inlandboatman union employees and has hired a professional recruitment agency to help.
But even when the state finds an employee, it is not always enough. At AIDEA, human resources director Megan Schmidt said it can take two to four weeks to get approval from the Office of Management and Budget to hire a candidate, even when the position is budgeted and the interviews are over.
Sometimes, she says, that candidate has taken a job with someone else in the meantime.
“I think we’re hit as hard as everyone else,” said Craig Richards, chairman of the board of Permanent Fund Corp.
Richards said the company’s hiring issues predate the state’s recent troubles. Over the past five years, 43 company employees have resigned for other jobs.
“It’s an acute problem,” Chad Brown, the company’s chief human resources officer, told directors this month.
Brown said it’s “pretty easy to pinpoint the main reason a person leaves. … Compensation is always No. 1 or No. 2.”
“Compensation was a consideration for me, and it’s for anyone who leaves,” said Steve Moseley, former head of the Permanent Fund’s alternative investments division.
Prior to leaving the Permanent Fund, Moseley oversaw private equity investments, which were by far the fund’s most successful segment and were the main source of its record growth last year. He now works with a private company in New York.
Moseley pitted the Permanent Fund against a private enterprise like a brewery. This brewery can increase its salaries without consulting the governor or the legislature or could get creative with incentives.
“We could respond, we could anticipate (people leaving). Presumably, we could offer to pay people more or we could create a growth opportunity for them, open another office or introduce a new brand and hand them over,” he said.
“Compensation is a real issue,” Moseley said. “I didn’t just leave more money, but it’s the easiest thing to measure, and probably because it’s one of the hardest things to fix, it’s still one of the hardest. big problems, and I think that explains the turnover (at the Permanent Fund).”
The Trustees of the Permanent Fund are responding to this question by advancing the idea of a “salary reset” that will compare employee compensation to what similar organizations are paying elsewhere.
There is no US institution exactly like the Permanent Fund Corp., so the company is considering hiring a consultant as a long-term project.
In the meantime, Richards said, the company will likely take some sort of interim measure for employees this year. One possibility – yet to be determined – is to divert money intended for performance bonuses.
Other state agencies could also see pay increases. This year, the Alaska Legislature passed House Bill 226, which calls for a general 5% wage increase for non-union state employees.
State attorneys would get a 20% raise, and judiciary employees — excluding judges — would get a 10% raise.
This bill is now on the desk of Governor Mike Dunleavy, who has until August 1 to sign it, veto it, or allow it to become law without his signature.
“Both the state and the private sector have difficulty recruiting new workers. This is a problem that is happening not just in Alaska, but across the country,” said Jeff Turner, the governor’s deputy communications director.
“Each State Department has ongoing recruiting drives and all vacancies are advertised on Workplace Alaska. Alaskans seeking employment are strongly encouraged to apply for any position for which they are qualified,” he said.
Earlier this year, Dunleavy vetoed millions of dollars intended to pay hiring and retention bonuses.
The governor’s office hasn’t said whether it will do the same for the bill to raise wages for non-union state workers, but Rep. Andy Josephson, D-Anchorage and sponsor of the bill, said he believed the governor would allow him to become law without his signature.
“The first paycheck supposed to be reflected with the higher salary should come on Halloween day, I was told,” he said.