State and local governments trail private sector in hiring, says study

Many are facing serious challenges in recruitment and retention – and workers are accelerating retirement plans.

State and local governments are facing serious challenges in recruitment and retention of employees, a study by Mission Square Research Institute has found.

The report, “State and Local Workfforce 2022,” surveyed state and federal government human resources professionals last spring and found that the COVID-19 pandemic caused a significant loss in employment but that some of that has bounced back.

The researchers found that overall, employment declined from the beginning of the pandemic to June 2020 by 8.5% for local governments and by 4.4% for state governments. Half or more of the decline was reversed in the months that followed: by February 2022 local governments were seeing a net loss of 4.3% and state government had a net loss of 1.3%.

This was contrasted with job losses during the Great Recession, when job levels did not bounce back for more than four years.

Workers are accelerating retirement plans

In the study, even though only 41% of respondents felt their employees were financially prepared for retirement, 53% said that employees are accelerating retirement plans, the highest percentage to report that finding since the survey began.

“This finding is consistent with data from the Research Institute’s survey of public sector employees regarding COVID-19, which showed that as of October/November 2021, 33% were considering retirement, with 42% of those who were considering either retirement or leaving the workforce indicating burnout caused by the stress of doing their job during the pandemic as their top reason,” the report said. The aging baby boomer generation is likely to be a factor in a higher rate of retirements, the report suggested. It found that 41% of respondents see the largest wave of retirements hitting in the next few years.

Although respondents indicated some employees were not financially prepared for retirement, that number has improved a bit (it was 45% in 2021). “Some retirement confidence may have returned with stronger financial market performance since mid-2020, or it may also reflect an increasing emphasis on pension and supplemental retirement funding or on employee financial wellness programs,” the report said, adding that many public agencies have been prioritizing employee education in this area.

Governments hiring more, still having trouble filling key positions

The report found that 55% of respondents said their government had hired more full-time staff in 2021 than they did in 2020. The telework boom has also continued: 54% of respondents provide for regular hybrid staffing.

Some of the more troubling signs: 65% or more identified a list of 10 key positions that were hard to fill. Respondents reported having a hard time filling jobs in nursing (83%), engineering (78%), policing (78%), dispatch (75%), and building permitting and inspections (73%).

The researchers noted that the most recent survey included more questions about hybrid work, due to changes in working arrangements. It found that full-time telework declined, with 22% of respondents reporting using that arrangement in 2022, down significantly from 54% in 2021.

However other changes have been made—54% of respondents said they had adopted flexible schedules, such as four 10-hour days.

“Regular hybrid work and full-time telework are more common among governments with 500 or more employees (70% and 36%, respectively) than among those with under 500 employees (38% and 10%, respectively),” the report said.

When asked about future priorities, respondents from state and local governments ranked offering competitive compensation as their highest priority, with 86% ranking it as important, the study said. The researchers also found a significant challenge with turnover: 67% of respondents said it was an important priority in 2022, up from 44% in 2021.