CalPERS, the state's massive public pension system, is back in hiring mode, big time.
The fund's board of administration moved Wednesday to create 86 new positions ASAP.
If all of the new jobs are filled – and that's not a given – the new hires would add $16.3 million to CalPERS' $357.6 million administrative budget and bring its total headcount to just shy of 2,600 employees.
In the time it took to read this, some of you have done the math: The new hires would cost nearly $190,000 each. So why might the state have trouble hiring?
Nearly all of the jobs are in the fund's information technology and financial investment divisions, high-skill positions that employers gouge each others' eyes out to fill.
"When the economy improves, especially in IT, it gets harder to recruit," said Dale Jablonsky, CalPERS chief information officer.
Private-sector computer programming consultants, for example, can earn double to four times what the state pays for similar work.
Those higher wages translate into higher contracting costs for CalPERS, Jablonsky said, especially hourly-based agreements that give private firms a perverse incentive to drag out jobs. Currently, CalPERS is carrying $19 million in IT contracts alone.
The fund also is eyeing the end of its contract with Accenture, the company behind the $500 million-plus my/CalPERS computer project that came to bumpy life last year. As those private consultants leave, state employees will have to maintain the system.
"Without approving the new IT positions, knowledge transfer to state staff from IT consultants will be compromised," a Wednesday report to the board said, "and the reliance on external consultants will remain."
It's difficult to hire financial staff, too, said CalPERS' Financial Office division chief Russell Fong.
While the fund's money managers are among some of the highest-paid state employees in California – 25 investment portfolio managers earned between $250,000 and $445,000 last year – their Wall Street counterparts earn far more.
"The salary becomes a competitive issue" for recruiters, Fong said.
Delaying the investment unit positions, staff said, "will compromise our ability to reduce the contract expenses the enterprise was hoping to achieve."
CalPERS operates on contributions it collects from employees, employers and returns from its $245 billion portfolio, so there's no direct hit to the state's shaky budget for the staffing increase.
The fund fell into steaming political soup the last few years, however, when its investments pancaked, its long-term obligations grew and it had to hike contribution rates on state and local employers – and by extension, taxpayers.
CalPERS officials said Wednesday that the 86 jobs are "mission critical" positions winnowed from an earlier proposal to add 177. They clearly think the hires will improve the bottom line. Let's hope so.