As we usher in a new decade, the year 2020 will present both challenges and opportunities for state and local government employers looking to recruit, retain, and develop talented employees.
Recent research by the Center for State and Local Government Excellence (SLGE) reveals key issues facing state and local government leaders in the year ahead, as well as strategies being used to manage public employee benefit programs, attract and retain a talented workforce, and provide financial security to public sector employees.
Hiring is impacted by both low unemployment and competition from the private sector, with positions in key fields like policing, engineering, maintenance, skilled trades, and information technology identified as hard to fill (see SLGE’s annual State and Local Government Workforce Survey, done in partnership with IPMA-HR and NASPE). While HR managers perceive the benefits packages their governments offer to be competitive within the labor market, only 56% see salaries as being competitive.
Non-traditional benefits, such as flexible work arrangements or student loan assistance (see Workforce 2030 Summit: Key Takeaways report), as well as non-traditional staffing solutions like gig economy hiring or staff sharing may serve a means of bridging the gaps and expanding capacity.
Emphasizing the ability to “make an impact” on the community can help governments build a public service brand and appeal to those candidates who are looking for more meaning in their work (see Workforce of the Future).
Governments may face challenges in effectively communicating the attractiveness of total compensation (salaries and benefits), especially when complex pension benefits may not be intuitive – or as attractive to employees who are living paycheck to paycheck. To foster better understanding, as well as long-term planning, governments and employees both see value in financial literacy programs.
Employee decision-making around retirement savings can also be supported by auto-enrollment programs, which are already allowed in several states and can lead to increased employee saving, while preserving their ability to opt out.
Incorporating artificial intelligence into recruitment can help streamline time-to-hire, make more efficient use of available staff time, and result in hires who better match the organization’s needs and culture. With these benefits also come challenges for consideration, such as ensuring AI models do not result in unconscious bias or overemphasize less important job candidate characteristics (see Workforce 2030 Summit: Key Takeaways report).
Specialized fields such as health and human services and K-12 education face challenges such as burnout, graduation rates that are not keeping pace with retirements, and difficulty in recruiting to rural communities. Strategies to mitigate these pressures include overfilling positions, enhancing mentoring and other peer-to-peer networking, and considering changes in regulations on post-retirement employment.
Pension funds have remained fairly stable recently (at an aggregate funded ratio of 73%), but significant variation among state and local plans remains. Decision-makers are looking to maintain or exceed actuarially-determined contribution levels, or put in place variable benefit and contribution arrangements that can result in automatic adjustments. Enacting such formulas can create predictability around the range of possible adjustments, while also avoiding implementation delays or rushed decision-making in the throes of a funding crisis.
To make informed decisions about the management of public pensions, it will continue to be important to avoid generalizations about the status of all retirement systems. When data from the Public Plans Database is analyzed, each plan’s specific performance may be considered as compared to its own history or to other funds in that state or around the country.
Even when pension plans themselves are well-funded, it is critical to pay attention to the unfunded liabilities for other post-employment benefits (OPEBs), like retiree health care. SLGE research in 2020 will continue to explore various options state and local governments have in sustainably providing quality retiree health benefits.
Despite the challenges noted, there is reason to remain hopeful in 2020 as state and local governments prepare for the workforce of the future (69 percent of those attending the Public Workforce 2030 Summit expressed optimism on the outlook for the state and local workforce by 2030).