Consultant finds most Kodiak city jobs pay below market, recommends new pay scale

A consultant has found that most City of Kodiak positions pay more than 5% below the average of comparable Alaska municipalities. McGrath Human Resources Group presented its classification and compensation study to the Kodiak City Council at a Nov. 4 work session and recommended a new pay schedule.

McGrath compared Kodiak with 14 Alaska cities and boroughs, including Juneau, Sitka, Ketchikan and Kenai. At the first step of the city's salary ranges, 62% of positions fall more than 5% under the market average. At Step 8, that figure is 75%. At Step 15, it is 74%. The study also found 79% of the city's job classifications have range minimums that lag the market.

The city's workforce is young in its jobs. The study found 49% of employees have less than two years of service, and 76% have less than two years in their current position. The final report puts average tenure at 5.44 years. It says about 23% of employees are 55 or older and may consider retiring over the next decade, but it names the city's developing workforce, not retirements, as the larger concern.

The city now uses 15 steps and 30 pay ranges, with steps worth 2.5% up to Step 10 and 2% after. McGrath recommends 10 steps worth 3.5% each, with 7% between pay grades, anchored to the 50th percentile, the middle of the market. New hires would start at market minimums and reach the market rate within about two years, with step raises tied to documented performance. McGrath also recommends long-term planning toward the 60th percentile and market updates every three to five years.

The recommended option would place each employee on the step closest to current pay, with no pay cuts. McGrath estimates it at $302,542.60, based on the August 2026 roster, before benefit costs. Individual raises would range from 0% to 35%, averaging 5.13%. An alternative placing workers by years in position would cost $512,557.40. Neither option would be retroactive.

On benefits, the study calls the city's health insurance highly competitive and suggests adding a floating holiday.

Interim City Manager Tim Putney, in an agenda report, said the approach is intended to help the city recruit and retain qualified employees while keeping long-term fiscal sustainability.

Work sessions take no formal action. McGrath recommends putting the new schedule in place before the next budget cycle.