WORKFORCE TRENDS to Watch in 2023

BY RIVKA LISS-LEVINSON, PH.D. AND GERALD YOUNG

City and county managers in local governments across the United States, along with state governments and other public service organizations, faced yet another challenging year in 2022. At the same time, public service leaders have gained important insights on approaches to workforce management and support while attracting new talent.

Recent research by MissionSquare Research Institute (missionsq.org/ researchinstitute) highlights six key strategies and actions that public service employers can take in 2023 to be employers of choice as they look to attract and retain the next generation of state and local government workers.1

1Communicate the Full Value of Benefits

The wages advertised for a position represent only a small portion of the full value of a job’s financial and other benefits. Public service jobs often include more than “traditional” benefits like health insurance, pensions, and deferred compensation.

Benefits also can include paid leave, life insurance, flexible scheduling, and student loan or housing assistance, as well as important intangibles like greater job stability in the public sector, which enhances an employee’s ability to save for emergency expenditures and long-term plans.

The data suggest that those working in state and local government do generally know and acknowledge that salary is just one part of the total compensation package— and perhaps not the most compelling benefit employees receive. While 44% of HR managers feel that the wage compensation that they offer their employees is competitive with the labor market, nearly twice as many (85%) believe that the benefits compensation they offer to their employees is competitive with the labor market. However, salary is just one part of the total compensation package. In advertising vacancies, governments will find greater success by quantifying this full value proposition of working in state and local government.

2 Customize Recruitment Appeals

Diversity, equity, and inclusion (DEI) programs are important to many jurisdictions’ recruitment and retention efforts. But just expanding recruitment outreach to include a nearby historically black college or university (HBCU), for example, does not mean there’s a truly customized DEI effort. Rather, each position’s recruitment plan may include new audiences, active partnerships with outside agencies (e.g., colleges, school districts, job training programs, neighborhood or civic associations, specialized media, and private sector groups). It also may include outreach that communicates in ways that best resonate with each of these audiences, like trading bureaucratic descriptions for missionfocused appeals and plain text. Employers also may benefit by tailoring campaigns to appeal to candidates with different benefit focuses depending on their life stages or economic circumstances. In 2023, MissionSquare Research Institute will be conducting a survey with younger workers (those under the age of 35) to better understand the career and financial issues that are most important to younger public sector workers. Addressing their specific concerns, needs, and preferences can help employers better tailor their recruitment efforts to this next generation of state and local government workers.

3 Maintain Retirement Plan Funding

While 2021 data showed steady funding for retirement plans, 2022 brought significant economic volatility impacting individual finances and worker anxiety. A vast majority (84%) of state and local government workers surveyed reported that current economic conditions and market volatility make them feel anxious about their current personal financial security. They are worried about issues such as whether they will be able to retire on time, whether they will have enough money to live comfortably in retirement, and whether they will have enough money to last them throughout their retirement.

A key objective for plan sponsors is to weather volatility and commit to maintaining actuarially determined contributions. This will help ensure that funded levels do not drop, which would place additional pressure on future contributions or on potentially higher-risk investment strategies designed to make up for any shortfalls. Full funding of retirement plans supports the dual goals of long-term fiscal stability and leveraging retirement plans to serve as effective workforce recruitment and retention tools.

4

Restructure the Workforce

The Great Recession and The Great Resignation have been significant disrupters to the public workforce status quo. In early 2022, more than half (52%) of state and local workers reported that they were considering leaving their jobs voluntarily due to COVID-19 to do any or all of the following: to change jobs, to retire, and/or to leave the workforce entirely. This is particularly concerning given that those under the age of 40, African Americans, and those in K-12 education—groups that are already difficult to recruit for—were among those most likely to be considering changing jobs.

However, this time of change also offers opportunities to rethink future staffing models. Workforce restructurings anticipated in 2023 and beyond not only stem from the pandemic and economic changes, but are also tied to evolving technologies touching every field, from customer service to accounting to transportation. And while automation may not fully replace certain jobs, it is certain to contribute to job restructurings and the need to update job descriptions. Concurrently, employers can consider part-time or temporary staffing models and explore new ways of partnering in the provision of services with other governments, gig workers, or the general public.

5 Take a Holistic View

As of early 2022, just over half (51%) of state and local government survey respondents described their current morale regarding work as positive. However, they also reported feeling stressed (44%), burned out (42%), and/or anxious (39%) while at work. The pandemic normalized the idea that it is okay for workers not to be okay. Now, there’s a focus on worker mental health and burnout as real concerns that employers must take seriously.

And as persistent inflation leads to consideration of compensation changes, it will no longer be enough to point to cost-of-living adjustments and end the conversation with employees there. Rather, employers should lean into

State and local government workers take great pride in serving their communities. This has been one of the most consistent research findings in MissionSquare Research Institute’s surveys of public sector workers throughout the COVID-19 pandemic. Employers can engage with employees to learn what aspects of their jobs are most rewarding, their career goals, and how employers can provide professional growth opportunities or other forms of support. Employers can also assist their workers by providing offerings such as financial wellness programs and other benefits that can improve financial and overall health.

6 Prioritize Data-driven Decision Making

existing staff, and strategic action on the data collected to avoid preventable staffing or retention problems. By proactively assessing and engaging in successful strategies, workforce management can become a tool that enables employers not just to respond to problems that arise, but to develop the talented and diverse workforce that they need to perform essential services—and to help those individual employees thrive.

difficult conversations with team members about their financial stress, workload, health, or childcare issues. While employees are looking for improved compensation, they are also seeking other forms of assistance to reduce stress, such as hiring more staff or reducing workload, or providing more emotional support (e.g., respect, acknowledgment, encouragement).

The institute’s recent DEI survey found that a majority of governments identified workforce DEI as a priority, yet about a quarter are not tracking DEI results. Institute research also found 85% of governments are performing exit interviews, but just 37% are performing employee satisfaction surveys, while only 11% are conducting stay interviews. Given these findings, it is not surprising that less than six percent of governments are using the data from such methods to evaluate their DEI results.

More generally, public service workforce management cannot be viewed as something that is only managed at budget time or at the end of a worker’s career. Instead, it requires timely analysis of recruitment results, regular check-ins with

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MissionSquare Research Institute promotes excellence in state and local government and other public service organizations to attract and retain talented employees. The organization identifies leading practices and conducts research on retirement plans, health and wellness benefits, workforce demographics and skill set needs, labor force development, and topics facing the not-forprofit industry and education sector. MissionSquare Research Institute brings together leaders and respected researchers. More information and access to research and publications are available at missionsq.org/ researchinstitute.

Endnote

https://slge.org/wp-content/ uploads/2022/12/59599sixtrendstowatch_122922.pdf

RIVKA LISS-LEVINSON, PH.D., is senior research manager at MissionSquare Research Institute.

GERALD YOUNG is senior research analyst at MissionSquare Research Institute.