Alaska Eyes Outsourcing Payroll for 14,000 State Workers at $4M/Year

NewsData.io · United States · Oct 6, 2026

Alaska's Department of Administration is soliciting proposals to outsource payroll processing for up to 14,000 state employees, with a budget of $4 million per year — down from the roughly $10 million it currently spends. The move follows years of staffing problems in the state payroll department, including 1,500-plus pay error reports in fiscal year 2025 and a 58% vacancy rate among payroll positions. A rollout to the first departments is targeted for April 1, 2027, with full transition by year-end. Staffing firms with public-sector payroll processing capabilities may find a contracting opportunity here, while the displacement of 78 state payroll employees could add to the candidate pool in Alaska.