PIERRE, S.D. (KELO) — More than $38 million in targeted job payment adjustments could be coming for state employees in South Dakota. 

That’s what the Bureau of Finance Management and the Bureau of Human Resources advocated for Wednesday to lawmakers on the Joint Committee on Appropriations

Republican Sen. Jack Kolbeck wondered if the $38 million would get state employees close to the median salary in each respective field. He asked BHR Commissioner Darin Seeley if it could solve a problem that lawmakers have “been kicking the can down the road for a number of years.” 

Seeley said there’s not a silver bullet, but the targeted raises would put state government jobs in a more competitive area. He believed there wouldn’t be a need for more targeted increases in future years. 

“Our benefit package is among the best in the state and our pay being much more close to the rest of the market, we should be in a competitive advantage position as an employer from a total rewards perspective,” Seeley said. “We have a huge advantage and we’re working to take advantage to make the most of it.”

Ellen Zeller, director of BHR’s Centers of Excellence, told lawmakers a four-year state employee compensation study has shown progress in state employee pay since 2013. The survey uses a market of six surrounding states’ state governments as well as in-state private and public businesses. 

The base compensation benchmark had South Dakota state employee jobs making 17.3% less than the base benchmark in 2013. The benchmark number was still in the negative but fell to 8.6% in 2021. 

“Over the years, we have routinely encouraged state government, as matter of fact we had a rule to hire at a minimum of a pay range. That rule was in place for years and years and years,” Zeller said. “When Commissioner Seeley came in, we needed to take a look at that because we had so many people at the low end of the range.”  

Zeller showed charts reflecting how state employee pay ratios have moved to within 80% of the payment range minimum. 

Bureau of Human Resources slide on employee pay comparison ratio.

“No one’s paid lower than 80% of the midpoint,” Zeller said. “While we still have a high percentage below the range midpoint, many more are closer to it and even above it. We would see this trend continue this year if we are able to give the targeted adjustments that we have planned.” 

Seeley said BHR worked hard to determine appropriate starting pay for jobs in each job family by grade. 

“We did this based on survey data, as well as conversations with team members and talent acquisition compensation, HR, business partners and agency leaders,” Seeley said. “We’ll have starting pay rates that are appropriate to the position and we’ll reduce pay compression within state government that has been building for years.” 

Bureau of Finance Management slide on state employee targeted pay.

BFM has said the targeted pay raises will impact 290 jobs in more than a dozen different job families and will affect more than 4,800 permanent employees. 

BHR has 73 full-time employees and it added three recruiters last year to increase strategic recruiting functions. 

Eric Ollia with the South Dakota State Employees Organization testified after BHR’s presentation and told lawmakers his organization represents 200 retired state employees and about 400 regular state employees. 

He thanked Commissioner Seeley and lawmakers for the discussion on state employee pay and said he’d like to see employee associations be treated as partners with BHR. 

“We could offer the state a good service by being involved with human resources in these decisions and partnering,” Ollia said. 

Republican Rep. Tony Venhuizen said he followed the SDSEO Twitter feed regularly and brought up a tweet from Jan. 13 from Ollia complaining about the one hour that state-employee compensation got in the appropriations committee.  

“We talked about state employee compensation in the very first hour with BFM and with every single hearing from every single agency all year and we have a workgroup on it,” Venhuizen said. “This is not the only time we talk about it. I think it might be the single biggest topic we address in this committee. I hope the next time you tweet to your members you’ll let them know that is a major focus of this committee and not an afterthought.” 

Ollia said the SDSEO Twitter feed is more aimed at journalists and politicians than SDSEO members and said he wanted Venhuizen to know he respected him. He said he’d like the state employee compensation hearing moved up in appropriations to add more context to other state agency departments. 

“You don’t have the full picture when you look at how a benefit plan works and how compensation works,” Ollia said. “That was my point with that tweet.”