Overcoming worker shortages in public sector amidst growing demand

While the private sector has more than made up the jobs it lost immediately after the advent of the pandemic, the public sector is still struggling. Since February 2020, the private sector recovered all its job losses, and filled nearly 900,000 new jobs, while the public sector is still at a net loss of 650,000 positions during that same timeframe.

Across the country, local governments are dealing with varying degrees of workforce shortages. And while the current teacher shortage in public education is no secret, the extent of the issue reaches beyond the classroom. In Maryland, staffing is down 14 percent in public safety, 10 percent in transportation and one in four nursing positions is vacant. In Richland County, S.C., the government faces a 25 percent vacancy rate, a significant increase from 13 percent prior to the pandemic. In Colorado, one county’s bridge and road department can’t fill 36 of its 190 positions.

Public sector agencies and leaders are looking for new ways to expand their workforces, find the right incentives to attract and retain employees, and employ creative concepts to not only fill the current gaps but to ensure adequately skilled staffing in the future. Arriving at the answers will require innovation, an embrace of untraditional methods and a clear focus on action.

What’s driving worker shortages?
Compensation, benefits and inflation: Private sector salaries have grown faster than state and local government workers’ pay. Since 2020, private sector wages have grown 5.5 percent, outpacing the public sector’s 3.4 percent wage growth. Employers in all sectors are struggling to hire and retain talent, and many have had to increase wages and benefits to do so. The rising cost of fuel, food and other consumer goods and recent interest rate hikes are exacerbating the problem.

The Great Resignation, a term coined to capture the widespread movement out of current jobs for a variety of reasons—retirement, better working conditions, entrepreneurship—is likely a long-term trend, enhanced by the impacts of the pandemic. While this wave of resignations occurred across industries and sectors, private employers generally fared better as they offered premium pay rates and increased flexibility, in many cases luring away public sector workers.

Education requirements: Two-thirds of Americans over the age of 25 do not have a bachelor’s degree or higher. That may present a challenge for employers who still require a four-year degree or other certification for certain job openings.

A major opportunity for the public sector is a trend toward skill-based qualifications and away from degree-based job requirements. This has been catching on in the private sector, where IBM, Dell Technologies and Bank of America are among many private employers who have waived the college degree requirement for certain roles. By doing so, they’re able to improve diversity and access an untapped pool of talent during a particularly tight labor market.

The Silver Tsunami: Nearly 50 percent of Baby Boomers employed by municipalities are set to retire over the next five years. Overall, 25 percent of U.S. workers are aged 55 and over, and the mass migration is being acutely felt in the public sector.

Historical challenges with hiring: State and local governments were understaffed at the start of the pandemic, so shortages today are being felt even more acutely.

Actions public sector organizations can take immediately
As the world emerges from the COVID-19 pandemic, public sector agencies and leaders have opportunities to take critically needed actions to secure the future of the public sector workforce and prepare government for a continuity of services essential to the needs of citizens.

• Align education and skills-attainment with employer and industry needs
  First, higher education—both four-year degree institutions and community colleges—should align curriculum and learning with the needs of local industries and employers, creating both a larger demand for education and critical, specialized-skill attainment as well as a well-defined talent pathway from institution to employer.

  State and local education systems serve as a natural pipeline into the workforce. Redesigning or redeploying learning, training, and upskilling programs can engage diverse populations who have been historically excluded from higher education opportunities. This also ensures graduates of these programs are prepared for high-need jobs.

• Remove barriers to entry and embrace workforce transformation and innovation
  Public sector organizations are in steep competition with the private sector for the best workers. It is critical to meet the expectations and needs of potential employees including flexible hours, competitive salaries and benefits, a good work/life balance and development opportunities. Moving away from the status quo and embracing incremental innovation is key to preparing the public sector workforce and agencies for the future.
• Open the aperture on eligible talent
  Part of that transformation is expanding opportunities to workers who might face employment barriers, such as the formerly incarcerated, people with disabilities, immigrants, or refugees. These often-overlooked workers can help fill vacancies in crucial areas within public sector.
• Flexible education requirements
  To compete with the private sector, there are opportunities for public sector organizations to attract more candidates by removing four-year degree requirements and moving to skills-based hiring in some jobs and roles.

  Recent examples of this include Maryland, Pennsylvania, Utah, and Alaska all of which waived four-year degree hiring requirements in order to be more attractive to candidates into public sector roles. Instead of a degree, these states now favor experience and skills training for public sector roles, citing a need to expand employment opportunities for their state’s citizens.

• Enable apprenticeships
  Public sector apprenticeships are a powerful but underutilized tool to fill vacancies and engage employees who otherwise would not qualify for a position. In the federal government alone, there are more than 40 apprenticeshipsemploying more than 120,000 workers across multiple sectors. They can lead to high retention at a lower cost as apprentices learn on the job, earn credentials and contribute constructively while getting paid. Additionally, apprenticeships have proven to be bridges to long-term employment. Ninety-three percent of workers who completed an apprenticeship were employed six months later with an average salary of $77,000.
• Create efficiencies in systems and hiring
  To transform the workforce, consolidation of and within state agencies can help streamline decision making and better identify hiring needs, eliminating redundancies and breaking down silos.
• Wages and benefits
  Today’s workers demand not only higher wages, but also increases in flexibility and benefits. Public sector agencies and leaders should look to areas that can create efficiencies and reduce costs, while concurrently allowing for improving wages and benefits of workers. Today’s employees look for benefits that fit their needs and lifestyles, leaving one-size-fits-all benefits in the past. However, there are some perks that many workers look for, including insurance and resources for both physical and mental health, increased paid time off for vacations and parental leave, and flexible environments with opportunities for remote or hybrid work.

Change is possible
Despite chronic worker shortages, exacerbated by the impact of the pandemic, public sector leaders have real opportunities to close the gap and design for a public sector workforce of the future. It starts with a realistic assessment of the organization to identify inefficiencies and opportunities. Once organizations understand their challenges, creative solutions paired with intentional planning can be used to begin to overcome their specific hurdles.

Change should by design be incremental, but with the right plan in place, the worker shortage can improve, and services won’t miss a beat.

Maggie Koziol is a senior director with Alvarez and Marsal Public Sector Services in Washington, D.C. She brings more than 19 years of experience in analysis, management and strategy for critical workforce development and education initiatives and specializes in supporting clients in public and private sectors locally, nationally and globally.