Alaska's payroll costs $10 million a year. It wants a contractor for $4 million.
The State of Alaska plans to outsource payroll for about 14,000 public employees, the Alaska Beacon reported on Monday.
A feasibility study dated 28 September puts today's cost at about $10 million a year. The state's request for proposals says it is prepared to pay a company $4 million a year.
The study counts 78 payroll employees across state agencies, all affected. As of September, the study says, 58% of payroll positions were vacant, and a new hire can need a year of training. Employees filed more than 1,500 "notice of pay problem" reports in fiscal 2025.
The first outsourced paychecks would reach a handful of departments on 1 April 2027. Commissioner Paula Vrana said: "The final decision will be based on the proposals we receive." A public employees' union official said outsourcing "usually costs more and doesn't provide the efficiencies that you're looking for."
The $4 million is 40% of today's bill, for a team working with more than half its seats empty. The reported figures do not say what the $10 million would be with those seats filled, or what the switch itself costs.
Who here has moved payroll for a public body to a vendor, and did the yearly cost hold after the first year?
Sources
For your next steering committee
- 1Ask which exit clauses your largest software and services contracts carry, and when each can be used.
- 2Ask what leaving would cost, in money and in months.
- 3Ask who reads the contract when a dispute starts, and whether they have read it before.
Issue 01 of the ERP LEADERS brief puts a timeline, the three-number review and six questions on one page. Read issue 01
Welcome back. · Issue 01
