Legislature(2025 - 2026)ADAMS 519
04/21/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Salary Study | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 21, 2025
1:36 p.m.
1:36:53 PM
CALL TO ORDER
Co-Chair Schrage called the House Finance Committee meeting
to order at 1:36 p.m.
MEMBERS PRESENT
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative DeLena Johnson
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
Representative Nellie Unangiq Jimmie
Representative Jamie Allard
ALSO PRESENT
Paula Vrana, Commissioner, Department of Administration,;
Camille Brill, Acting Deputy Director, Division of
Personnel, Department of Administration,; Patrick Bracken,
Senior Vice President, Segal; Mike Verdoorn, Vice
President, Segal,; Richard Ward, Consultant, Segal;
SUMMARY
PRESENTATION: SALARY STUDY
Co-Chair Schrage reviewed the meeting agenda.
^PRESENTATION: SALARY STUDY
1:37:24 PM
PAULA VRANA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION,,
reviewed the reasoning behind the study.
1:42:00 PM
Representative Hannan there was already in statute some
periodic reviews, she queried the year of the last study.
Ms. Vrana responded that the last salary study was
performed in 2009.
Representative Hannan queried the human resources
recommendations.
Ms. Vrana responded deferred the question to Ms. Brill.
CAMILLE BRILL, ACTING DEPUTY DIRECTOR, DIVISION OF
PERSONNEL, DEPARTMENT OF ADMINISTRATION,, she did not have
the knowledge of the HR perspective, but that the statute
said something to the effect of regular review.
Representative Hannan asked why outside consultants were
necessary.
Ms. Brill responded that the classification had not been
static and there were regular updates, and agreed that
experts were not necessary.
1:47:29 PM
Representative Stapp was most interested in the 26 percent
of employees that were below the fiftieth percentile.
Ms. Vrana responded that the group of classes were
potentially below market.
Representative Stapp asked if they saw any correlation
between the classes that were listed at below market value.
Ms. Vrana responded that the trend was positive.
1:50:29 PM
Representative Stapp asked whether there was any
correlation between the below market folks and the vacancy
rates.
Ms. Brill responded that it drew more questions for her,
and what were the applicant pools or vacancy rates.
Representative Galvin asked if it was not the first
version.
Ms. Brill responded that it was a complex and large
undertaking, and it had gone through an iterative process
that changed over time.
Representative Galvin asked what the scope was and how it
had changed.
Ms. Brill responded that the iterative process included
changes to scope, and she was currently seeking more
information.
Ms. Vrana added that it included the incorporation of the
consideration of investments.
1:54:27 PM
Representative Galvin asked about the timing of the study
and felt that there was context she wished to have it
sooner.
Ms. Vrana responded that the state had been working
diligently and expeditiously and that the study was large
and complex.
1:57:35 PM
PATRICK BRACKEN, SENIOR VICE PRESIDENT, SEGAL, introduced
himself and the PowerPoint presentation "State of Alaska
Statewide Salary Study" dated April 21, 2025 (copy on
file). He began on slide 2, "Study Overview":
About Segal:
National consulting firm with 1,100+ employees,
celebrating over 80 years of serving clients
Mission-driven: Providing trusted advice that improves
lives
Independent, objective, and employee-owned
Not any solution your solution; personalized advice
and assistance
Mr. Bracken continued on slide 3, "Study Overview":
Compensation and Classification Assessment (2012)
Diagnostic review of the classification and
compensation systems to provide recommendations for
review and potential future initiatives
AlaskaCare consultants and actuaries (2014 present)
Employee Plan and Retiree Plan Technical and strategic
support Collective bargaining support Expert witness
testimony
Mr. Bracken continued to slide 4, "Study Overview, Segal
Experience":
State of Delaware
• 16,200 employees covered by over 1,000 job
classifications
• 155 benchmark job titles and distributed the
survey to 13 peer employers including Federal and
State Governments, local governments (Delaware)
and published data sources to represent the
private sector
State of Washington
Statewide Total Compensation Study
• 48,300 employees covered by over 1,500 job
classifications
• 198 benchmark job titles and distributed the
survey to 48 peer employers
Department of Corrections
• Conducted a total compensation study for 12 job
classifications by distributing a custom survey
to 7 peer employers
Administrative Office of Hearings
• Ongoing total compensation study covering 5
benchmark classifications.
• Distributed custom survey to 26 peers.
State of Rhode Island
• Conducted a comprehensive review of the current
personnel programs, practices, policies
• Analysis of data and information related to
recent changes to the State's pay and benefits
• High-level review of the State's classification
architecture and review of selected job series
and class descriptions
Oregon State Legislature
• 500 employees covered by 150+ job titles
• Developed a pay equity analysis framework
• Developed methodology to collect prior related
work experience
• Conducted outlier analysis and advised on
remediation options
State of Maine
• Developed updated classification structure and
job descriptions to reflect current functions and
required qualifications
• 100 benchmark job titles assessed across 10
peer organizations and published survey sources
representing private sector
State of New Hampshire Department of Administrative
Services
• 7 state police ranks and 100 job titles
representing other state employee categories
• Identified the most appropriate comparators,
which included the other five state governments,
in New England, and up to five county and city
governments in New Hampshire.
• For private sector data, we used well-respected
published sources of compensation and benefits
data
Mr. Bracken pointed to slide 5, "Project Roles and
Governance Structure
State Team
.notdefProvides Segal with insights and advice related to
State strategic goals
.notdefConfirms and endorses project approach
.notdefProvides feedback and guidance on key decisions
.notdefActs as liaison to Segal for project coordination and
execution
Segal Team
.notdefServes as compensation subject matter expert
.notdefDevelops and manages the work plan and timeline
.notdefResponsible for collection, review, and analysis of
all market data
.notdefCollaborates with the State Project Team to complete
comparative analysis and report findings
Throughout the study, the State Team role was to
provide advisory guidance and explanation related to
State compensation systems. Segal was responsible for
the collection, review, and analysis of all external
market data.
Representative Hannan asked about slide 4 which held an
almost exclusively public sector analysis, and she asked
how long they had been working on Alaska.
Mr. Bracken responded that Segal had been working with the
state since 2019.
2:01:58 PM
Mr. Bracken displayed slide 6, "Study Overview, Purpose of
the Study":
The State of Alaska commissioned a Statewide Salary
Study to evaluate how the State's pay plans compare to
other public and private sector organizations.
Mr. Bracken continued pointed to slide 7, "Study Overview
Scope of Study":
This study provides a comprehensive assessment of the
competitiveness of the State of Alaska's salary
structures by analyzing 404 benchmark jobs, across
various job families, occupational groups, and
bargaining units. Key elements of the study scope
include:
• Market Comparison: Evaluated State salary structures
against public and private sector peers at both the
50th (market median) and 65th (market-leading)
percentiles. This salary structure comparison does not
analyze individual employee salaries.
• Data Elements: All base pay compensation and health
insurance cost-sharing data effective as of January 1,
2025 and paid time off as of January 1, 2024.
• Base pay is defined as the published (or formalized)
salary structure pay grade range minimum, midpoint,
and maximum. It is considered the direct compensation
component of salary, exclusive of any other pay
related items such as overtime, supplements,
differentials, and pay supplements etc.
• Purpose: The report does not recommend pay levels or
adjustments for employees, but equips State leadership
with data-driven insights to:
• Understand competitive pay gaps with market
conditions
• Compete effectively for skilled talent
• Manage pay structures and related costs
This scope provides decision-makers with a clear,
evidence-based foundation for future compensation
planning. The focus is on reviewing and analyzing the
State's salary structures and does not include
evaluation or comparison of individual employee
salaries.
Representative Johnson wondered about the peer
jurisdictions.
Mr. Bracken replied that there was a slide that would
address the composition of the peer group.
Representative Johnson was happy to do it chronologically.
Representative Hannan asked about the peer jurisdictions,
and whether they had changed in the two different studies.
Mr. Bracken responded that the additional employers were an
augmentation to the original data set.
Representative Hannan wondered whether the unresolved
information technology study was included in the
presentation.
Mr. Bracken was not provided with any data on that issue.
2:07:24 PM
Representative Bynum asked if there were any limitations
put on them that would impact the outcome.
Mr. Bracken responded that there were constraints, but it
might not be considered a limitation.
Mr. Bracken continued on slide 8, "Data Collection
Benchmark Jobs":
The State identified 404 benchmark classifications
from the 1,083 current classifications (Partially
Exempt and Classified) for inclusion in the market
study.
2:11:38 PM
MIKE VERDOORN, VICE PRESIDENT, SEGAL, looked at slide 9,
"Data Collection, Custom Survey." He discussed slide 10,
"Data Collection Published Survey Additional Data Sources
Segal utilized the following published survey sources
to represent the public and private sector for the
State's
benchmark jobs:
Private Sector Sources
CompAnalyst (Salary.com)
CompAnalyst Market Data, a subscription database
maintained by Salary.com, includes pay data from
hundreds of professionally conducted employer-provided
surveys. For this analysis, we used All Industries,
Anchorage, AK base salary data.
Economic Research Institute (ERI)
ERI's Salary Assessor and Executive Assessor databases
aggregate pay data from hundreds of published data
sources for thousands of job titles. The data is
updated quarterly and provides salary information for
nearly any geographic area in the U.S. For this
analysis, we used All Industries, Anchorage, AK base
salary data.
PayFactors
PayFactors' Survey of Surveys is a compensation
database that compiles pay data from published data
sources and HR departments. PayFactors updates their
data constantly and provides salary information for
most geographic areas in the U.S. For this analysis,
we used All Industries, Anchorage, AK base salary
data.
Milliman Alaska Compensation Survey
Milliman publishes annual surveys gathering data on
compensation and benefit trends in specific regions or
industries and includes nonexempt, professional and
management positions compiled from major employers
within Anchorage, Fairbanks, Southeast, and
Northern/Western Alaska. For this analysis, we used
private sector and Anchorage, AK base salary data.
Public Sector Source
Segal Public Sector Compensation Database
Represents recent Segal compensation studies conducted
across the United States over the past two (2) years,
salary base pay range data from public sector
organizations representing 400+ organizations and
14,000 participant job match titles, geographically
adjusted using a cost of labor factor to Anchorage,
Alaska
2:17:07 PM
Representative Galvin asked about the methodology section,
specifically the out-of-state references. She wondered
whether Segal included them as peers to Alaska.
Mr. Verdoorn responded that there was a continuation of the
survey, specifically as a subset of the specific jobs in
the state.
Representative Galvin asked about moving into the Alaska
portion and noted there was heavy weight in Anchorage and
she was wondering how the date was integrated in the study.
Mr. Verdoorn responded that they relied heavily on the
state team.
Representative Stapp asked what they meant by overturning
every rock."
2:21:28 PM
Mr. Verdoorn responded that they meant sending emails,
making phone calls, and following up.
Representative Hannan asked how they evaluated the turnover
rate.
Mr. Verdoorn responded that there were data adjustments
within.
2:26:15 PM
Representative Bynum wondered whether there was access to
the other companies' data.
Mr. Verdoorn replied that through the survey, they signed a
non-disclosure agreement (NDA), in order to not
specifically reference the protected data in the study.
Representative Bynum asked how they used it.
Mr. Verdoorn responded it was one of the items used in the
data sets.
Representative Bynum asked if they were only looking at
Alaska or other model.
Mr. Verdoorn responded that they tried to use the most
appropriate data, and comp analysts in the study.
Mr. Verdoorn addressed slide 11, "Methodologies, Data
Adjustments":
Data Aging Factor
Annual Aging factor: 4.0 percent
Reflects trends from:
• National and Alaska labor markets
• All industries (Public Admin, Oil and Gas,
Utilities)
• Actual salary and structure increases
Based on multiple sources:
• WorldatWork Salary Budget Survey
• Bureau of Labor Employment Cost Index
• NCASG and Milliman Surveys
Cost-of-Labor Adjustment Factor
• All salary data were adjusted to reflect Anchorage,
AK as the base labor market.
• Adjustments used Economic Research Institute
(ERI) cost-of-labor differentials for peer locations.
• A positive adjustment indicates that the
comparator location has a lower cost of labor than
Anchorage.
• Example: Colorado's cost of labor is lower
? adjusted up by 109 percent to match Anchorage.
Workweek Adjustments
• FLSA non-exempt positions adjusted to align with
State's
37.5 or 40-hour workweek
• Ensures consistent comparisons across employers with
different standard hours
• FLSA Exempt (salaried) positions were not adjusted,
as they typically work beyond standard hours
2:29:13 PM
Mr. Verdoorn pointed to slide 12, "Methodologies, Market
Analysis Process":
Job Matching Process
• Matches based on overall comparability to State
benchmark job summaries
• 100 percent matches are rare due to differences in
size and structure
• Applied the "75 percent rule": work and
qualifications must be largely similar
• Broad/narrow roles excluded if not a true match
Data Sufficiency and Job Inclusion
• Segal followed U.S. Department of Labor Safe Harbor
Guidelines
• Benchmark jobs needed at least 5 peer matches or a
published survey match
• Jobs not meeting this threshold were excluded from
competitiveness analysis
• 384 of 404 benchmark jobs met data sufficiency
requirements
Quality Control Methods
• Job Matching and Survey Review:
• Peer outreach for validation
• Review of peer job descriptions
• Market Analysis:
• External Segal analytical staff performed thorough
quality review of data, formulas, and analysis
approach
Mr. Verdoorn looked at slide 13, " Methodologies, Market
Competitiveness":
Market Competitiveness Corridor
• Segal's Competitiveness Corridor defines pay
comparisons relative to identified market competitive
point.
• A 100 percent comparison means the State is equal to
the identified market competitive point (e.g., 50th or
65th percentile).
• Competitive range is defined as 95 percent to 105
percent of the identified market competitive point.
This framework describes how the State pay structures
align with identified market competitive points.
2:36:48 PM
Mr. Verdoorn discussed slide 14, "Methodologies,
Percentiles":
Understanding Percentiles in Market Data
• 50th Percentile (Median): Half of data points are
above, half are below.
• 65th Percentile: Higher than 65 percent of the
market, lower than 35 percent.
• Percentiles reflect position, not percentage
difference (e.g., 65th ? 15 percent above 50th).
Mr. Verdoorn pointed to slide 15, "Methodologies State
Salary Range Assumptions/Usage/Points":
During discussions with the State, it was determined
that the State's range minimum, midpoint, and maximum
will represents the followings steps:
1.The Alaska State range minimum represents Step A,
except for bargaining unit TA the state pay range
minimum represents Lane 1, Step 1.
2.The Alaska State pay range midpoint represents Step
F, except for the following bargaining units: Step E
for bargaining unit SS, Step J for bargaining unit LL,
and Lane 1, Step 3 for bargaining unit TA.
3.The Alaska State pay range maximum represents Step
O, except for bargaining unit TA, where the state pay
range maximum represents Lane 4, Step 1.
Mr. Verdoorn highlighted slide 16, "Market Analysis
Findings Overall Salary Structure Comparison":
In the overall combined market, the State's base pay
th
ranges are At Market at the 50 percentile, but Below
th
Market at the range minimum and midpoint at the 65
percentile, and At Market at the maximum for the 65th
percentile.
2:41:38 PM
Representative Bynum asked about industry alignment.
Mr. Verdoorn responded that there were various ways that
industry alignment were addressed in the study.
2:44:27 PM
Mr. Bracken displayed slide 17, "Market Analysis Findings
Overall Salary Structure Comparisons":
Compared with the minimum of the salary structure, 72
percent of employees in benchmark jobs are At or Above
Market compared to the 50th percentile, and 57 percent
of employees in benchmark jobs are At or Above Market
th
compared to the 65 percentile.
2:49:30 PM
Representative Johnson asked about the rate of change
analysis.
Mr. Bracken replied that it showed the static data points
associated with the minimums, midpoints, and maximums.
Representative Hannan felt that page ten had a concluding
narrative that differed from the presentation.
Mr. Bracken responded that the narrative was focused only
on the highly populated benchmark jobs.
Representative Hannan asked whether it related to the low
vacancy rate or whether there were more of them.
Mr. Bracken responded that it was definition in the report.
2:55:17 PM
Representative Stapp wondered whether the salary study for
executives and senior administrators looked at all of their
letters of agreement and standby pay.
Mr. Bracken responded that it was base pay comparisons
only.
3:01:09 PM
Representative Galvin felt that the 65th percentile at
market was a hard benchmark. She asked if there were any
states that Segal had analyzed where the salaries were at
or above market.
Mr. Bracken replied that many states had developed
compensation philosophies, and differed based on their
target markets.
Representative Galvin wondered whether they were properly
compensated for their skillsets.
Mr. Bracken did not have a good answer to the question.
3:07:21 PM
Co-Chair Josephson asked about the difference in outcome
representations, and perspectives. He specifically asked
about the difference between slides 10 and 16.
Mr. Bracken responded that 72 percent of employees were at
or above market in pay range minimum.
3:12:34 PM
Representative Hannan wondered whether the private sector
were the four that responded to the survey and whether the
public sector included any non-Alaskan entities.
Mr. Bracken deferred to Mr. Ward.
3:14:19 PM
RICHARD WARD, CONSULTANT, SEGAL, responded that the public
sector included entities both inside and outside of Alaska.
Representative Hannan asked whether the data was adjusted
for Alaska's geographic differential.
Mr. Ward responded in the affirmative.
Representative Hannan surmised that the private sector
benefit was only the four entities that responded to the
survey.
3:16:47 PM
AT EASE
3:17:11 PM
RECONVENED
Mr. Bracken addressed slide 18, "Recommendations":
Establish a Compensation Philosophy:
Develop a guiding strategy for compensation
Align principles across job families and bargaining
units
Redesign Salary Structures:
Group by occupational families
Define min, midpoint, and max for each range
Ensure consistent range spreads and midpoint
differentials
Align ranges to market benchmarks and pay progression
Improve Salary Structure Administration:
Streamline through occupational-based frameworks
Reflect supervisory differentials and incentive pay
best practices
Implement Structure Maintenance:
Conduct market studies every 3 years
Match jobs based on duties, not titles
Define labor markets by occupational group
Modernize Classification Structure:
Introduce internal job evaluation methodology
Review and streamline job classes
Schedule regular updates to maintain relevance
Mr. Bracken addressed slide 19, which pointed to further
discussion.
3:24:07 PM
Representative Stapp looked at the health benefits section,
and wondered whether the value of the plan should be
compared and not the cost.
Mr. Ward responded that in a compensation study, the cost
of the plan was an appropriate proxy for the value.
Representative Stapp wondered whether the compensation
study included the value of the plan or total cost of the
plan.
Mr. Ward replied that the study was the net cost of all the
items.
Representative Stapp queried the tool to measure the
benchmark.
Mr. Ward responded that they were a combination of a number
of sources including an internal proprietary pricing tool
that references data from across the country and industry.
Representative Stapp wondered why their own data from a
previous study was not included in the presentation.
Mr. Ward responded that the data from the previous analysis
was collected in 2016, and the updates since used the data
were mostly due to time constraints.
Representative Stapp asked why they did not commission new
numbers.
Mr. Ward responded that it was a determination of the
leaders under time constraints.
3:29:57 PM
Representative Galvin asked about the timing of the fast-
moving market change.
Mr. Bracken responded that all data was as of January 1,
2025.
Representative Galvin surmised that all the data was as of
2025.
Mr. Bracken replied that the base pay comparisons were from
2025, but the paid time off was from 2024.
3:33:47 PM
Co-Chair Josephson wondered how other states responded to
the reports.
Mr. Bracken responded that the reality was that responses
were varied, and all the employees were complex and had
multiple variables that impacted the decisions.
Representative Hannan asked if the study was being done
every three years.
Mr. Bracken replied that complex organizations often used a
staggered approach.
Representative Hannan asked if he were familiar with data
collection and asked if it was the kind of data that would
be used in the study.
Mr. Bracken responded that they did not do a data
collection.
3:39:15 PM
Representative Johnson wondered whether there had been a
change in the direction of private sector employment being
"better" than the public sector.
Mr. Bracken responded that, recently, that perception had
changed in the benchmarking work.
Representative Bynum asked about the next steps.
Ms. Vrana responded that the department had committed to
several next steps.
Representative Bynum stressed that the biggest question was
about the timeframe.
Ms. Vrana deferred to Ms. Brill.
Ms. Brill responded that the studies that were occurring
changed the plan.
Representative Bynum asked if they expected an immediate
change.
Ms. Brill did not know.
Co-Chair Schrage thanked the presenters, and discussed
housekeeping.
ADJOURNMENT
3:47:13 PM
The meeting was adjourned at 3:47 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SalaryStudyFullReport.pdf |
HFIN 4/21/2025 1:30:00 PM |
|
| 2025 Segal Compensation Study Presentation Alaska State Leg April 2025.pdf |
HFIN 4/21/2025 1:30:00 PM |
|
| SalaryStudyFAQsheet.pdf |
HFIN 4/21/2025 1:30:00 PM |
|
| SalaryStudyExecutiveSummary.pdf |
HFIN 4/21/2025 1:30:00 PM |
|
| SalaryStudyAppendix.pdf |
HFIN 4/21/2025 1:30:00 PM |