State Pay Lags Private Sector, Study Finds

An interim legislative study finds North Dakota state salaries trail comparable private sector jobs by roughly two to twelve percent.

Updated on Nov. 13, 2026 in Employment

State Pay Lags Private Sector, Study Finds

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Should state government raise pay for state employees to match private sector jobs?

An interim Legislative committee study found state employee salaries are approximately two to twelve percent below similar private sector jobs. State employee turnover fell from 14 percent in 2022 to 11 percent in 2025.

Why it matters

The findings bear on North Dakota's ability to recruit and retain public workers as a growing share of the state workforce approaches retirement eligibility. Lawmakers will weigh them as they consider pay and retirement policy.

The Human Resource Management System and OMB study puts state pay approximately 2 to 12 percent below comparable private jobs, while turnover dropped from about 14 percent in 2022 to 11 percent in 2025. The study does not break down which job categories account for the widest gaps.

The players

Gov. Kelly Armstrong

Kelly Armstrong is the Governor of North Dakota, whose executive budget proposal includes raises for state employees.

The details

The Employee Benefits Programs Committee authorized the study, which Human Resource Management System and OMB conducted with input from a HRMS survey asking state workers what they value. Ten percent of state employees are currently eligible to retire, and the state's retirement plan has shifted from a defined benefit to a defined contribution plan.

2022: State employee turnover stood at about 14 percent.
2025: Turnover fell to 11 percent.
December 2026: Gov. Kelly Armstrong is expected to present his executive budget, including a raise proposal, to lawmakers.

Roadmap

The retirement-plan change from a defined benefit to a defined contribution model is now colliding with a projected rise in retirement eligibility to 25 percent of state employees within five years. The pay gap and turnover figures suggest the state is weighing recruitment and retention against that shift.

State employees and job seekers should watch the governor's December executive budget for whether the proposed raises narrow the two to twelve percent pay gap. Residents who depend on public services may feel the effects if recruitment and retention problems persist.

The takeaway

Pay and retention data like these help show whether public employers can keep experienced staff as retirement eligibility climbs. Watch how the upcoming budget responds to the gap.