The City of Soldotna, like other employers in Alaska, is struggling to recruit employees. It took the city 12 months to hire a new city clerk and eight months to hire a new utility operator.
The city is now strategizing the best way to attract employees.
Soldotna City Council members convened earlier than usual Wednesday to discuss the issue during a work session, where they were joined by Dan Robinson, a researcher with the Alaska Department of Labor and Workforce Development, and by Mila Cosgrove, of Workplace Solutions. That’s a firm that offers services designed to build “organizational effectiveness,” according to the firm’s website.
Robinson provided a statewide overview of Alaska’s worker shortage using statistics like out-migration and census of working-age residents, while Cosgrove presented nine strategies developed in partnership with city officials that could help address the problem.
Soldotna City Manager Stephanie Queen wrote in a Jan. 30 memo provided to council members Wednesday that the city has experienced “longer than normal” recruitment lengths, such as for the city clerk position and two utility operator positions that took five and eight months to fill.
“Recruitment efforts for both positions required the City to take extraordinary (for us) steps of offering a hiring bonus and relocation expense assistance to attract the right candidate,” Queen wrote.
Among the strategies the city identified in partnership with Cosgrove to help address the problem are hiring bonuses, relocation assistance and paid parental leave. Others include making Christmas Eve an official holiday, increasing the city’s share of health insurance premiums for family plans and employee sabbaticals for management-level positions.
“In meeting the Council and public’s expectations for high quality municipal services, I cannot stress enough how critical it is that we have a talented and experienced workforce,” Queen wrote. “This will depend in part, on the City being recognized as a great place to live and work … but the specific wage and employee benefits we offer must also remain competitive.”
State trends
The January issue of Alaska Economic Trends, a monthly report published by the Alaska Department of Labor and Workforce Development, focused on the state’s 2023 employment forecast. The report partially attributes Alaska’s worker shortage to an aging population and migration losses, and notes that roughly one out of every five jobs in Alaska is filled by a nonresident.
The average number of monthly job openings in Alaska has more than doubled in the decade between 2012 and 2022 — from about 12,000 in 2012 to about 32,000 in 2022, the report says. That trend is also playing nationwide, where the number of job openings jumped from 3.8 million in 2012 to 11.2 million in 2022.
“We were already on an upward trajectory,” Robinson said of Alaska during Wednesday’s work session. “The number of job openings was increasing and the short explanation for that was, baby boomers are aging out of their working years. But then, coming out of COVID, the trajectory got steeper. So something happened during COVID to accelerate something that was already happening.”
Alaska’s working-age population — people between the ages of 18 and 64 — has decreased every year for the last nine years, the report says. Between 1990 and 2010, the number of people who turned 18 in Alaska became comparable to the number of people turning 65.
In 1990, there were about 7,000 Alaskans who turned 18, compared to just over 2,000 people who turned 65. In 2021, those numbers were roughly equal, suggesting that the number of people entering the workforce was similar to the number of people leaving it.
“We’re getting no, almost no population growth from what we call, broadly, natural increase, which is just births minus deaths,” Robinson told council members. “More specific to the working age, (there) are almost as many aging out as aging in.”
Soldotna, Robinson said, is a bit of an outlier when it comes to the working-age population. Though Soldotna gained about 350 residents between 2010 and 2022, the percentage of the city’s population that is working-age still fell, from 57% to 52% during the same time period.
People in Alaska aren’t just getting older, though. They’re also moving out of the state in record numbers. Each year between 2013 and 2022, more people have left Alaska than have moved to Alaska. Alaska’s current negative net migration streak, totaling about 53,000 people, is unprecedented, Robinson said.
“We’ve never had a stretch where we’ve had 10 consecutive years, ever, in Alaska’s statehood history, at least,” Robinson said.
The next longest negative net migration streak was four years in the 1980s, during a recession.
Alaska’s current out-migration relative to other states is illustrated in a map created by Alaska’s state demographer and presented by Robinson to council members on Wednesday. That map shows that, over the eight-year period from 2013 and 2021, Alaska’s working age population fell by between 5% and 7.4%. That puts it in the bottom three states nationwide for migration, ahead only of West Virginia.
The trend, Robinson said, predates the COVID-19 pandemic. Employee feedback generated through surveys and analyses suggest that among the top priorities for workers are higher pay, opportunities for advancement, a work environment that makes them feel good and flexible work options, such as working from home.
Those are some of the same priorities identified by the City of Soldotna and Workplace Solutions as they worked in recent months to brainstorm solutions. Working with O’Reagan and Cosgrove, Soldotna City Manager Stephanie Queen said Wednesday, produced nine strategies the city could consider moving forward.
The current labor market, Cosgrove said, is “highly competitive” because there are more job openings than applicants. At the City of Soldotna, she said 11% of municipal employees have provided notice of their intent to leave and an additional 6% are eligible to retire.
“Everybody is struggling with this,” Cosgrove said of the labor market.
City solutions
In coming up with ways for the city to more effectively find and keep employees, strategies can be categorized by what they hope to address — notably recruitment, retention and retirement or turnover. For each of the nine strategies identified, Cosgrove outlined, among other things, the way it would address a specific category, what policies would need to be implemented by council and what the financial impact to the city would be.
“We’ve tried to be very practical and tried to identify things that we thought would truly be effective in terms of recruiting or retaining individuals within the organization,” she said.
Recruitment assistance, for example, can help attract candidates who don’t live in Soldotna, creating a greater possibility of attracting high quality candidates for difficult-to-fill positions. She recommended that policies adopted by the council define things like eligible positions, set a maximum allowance amount and outline repayment provisions if the employee leaves voluntarily within four years of hire.
Another strategy could be the implementation of an employee referral program that would give cash payments to employees who refer a candidate ultimately hired by the city. Such a program would make employees ambassadors for the city and invested in the success of a new hire. An annual allocation of $5,000 would cover nine such bonuses of $500 each plus taxes.
Recruiting employees, though, is just as important as retaining them.
When it comes to employee turnover, for example, Cosgrove said turnover in a position can cost up to two times as much as the cost of that position’s salary. In addition to the “hard costs” that come with money to recruit for a new employee and overtime for other employees covering positions, the “soft costs” of turnover include low productivity while that position is vacant and a loss of institutional knowledge.
A survey of City of Soldotna departments, Cosgrove said, shows that a competitive market exists for the city’s sworn officer, director and utility operator positions. At the Soldotna Police Department, for example, three of the department’s 17 employees have given their notice of intent to leave, and an additional four employees will be eligible to retire in the next five years. The loss of seven employees at that department would reduce the workforce by more than 40%.
Citywide, more than one in 10 employees have given their notice of intent to leave, and an additional 12% will be eligible for retirement in the next five years. The loss of 15 of the City of Soldotna’s 62 regular employees would cut the workforce by about 24%.
Council members were generally receptive to the strategies presented during Wednesday’s work session.
Council member Dan Nelson said he was “very happy” with the information presented, and said attention to staff retention is important. In his experience onboarding employees, Nelson said the salary discussion happens quickly, while the quality of life discussion takes longer.
“I applaud the administration for doing this,” Nelson said.
If city council members are interested in moving forward with any of the strategies, the council could adopt a resolution formally considering the strategies in early March. Legislation amending city code to include new programs could be introduced and approved in March or April, and administration could finalize policy documents and program details in April or May. Funding for the programs, if needed, could be included in the city’s next biennial operating budget.
The council’s full work session can be streamed on the City of Soldotna’s website at soldotna.org.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
CORRECTION: This story has been updated to say that Soldotna City Manager Stephanie Queen authored the Jan. 30 memo to Soldotna City Council members.
