Amid shifting workplace expectations, local government employers must adapt

Constrained by inflexible budgets, local government employers can’t compete with the lucrative salaries offered in the private sector. And while recruitment has always been a challenge for public employers, the last two years have been especially difficult. From January 2020 to the same month this year, government organizations lost around 600,000 jobs—more than manufacturing, wholesale trade and construction combined, according to the U.S. Bureau of Labor Statistics.

“What has changed is the value that the private sector is offering: high compensation, flexibility, and rapid career advancement. What workers, particularly younger workers, want has also changed,” reads a new report from Deloitte, “Government can win the talent race—Here’s how.” Younger workers are looking for flexibility in their jobs, independence and work-life balance.

While this evolution started a few decades ago, the pandemic accelerated trends. This transformation can’t be understated. After two years of Zoom meetings and telecommuting, remote and hybrid work situations have become expected across the board.

Amid these changes, employee turnover is unprecedented.

For example, the Texas state auditor reported a 38 percent turnover among state employees under 30 years old. And last November, the U.S. Department of Labor reported that 3 percent of all workers (or 4.5 million people) had quit or changed their jobs.

“For many, the pandemic prompted reflection about what is most important in their lives. Work, it turns out, wasn’t as important as many had thought, and people became less willing to center their lives around their job,” the report says.

The emerging talent crisis has prompted a response from industry advocates, especially given the influx of federal dollars that’s about to flow to cities and counties via the bipartisan infrastructure legislation and the American Rescue Plan Act. In a joint statement, the National League of Cities, U.S. Conference of Mayors, National Conference of State Legislatures, International City/County Management Association and National Association of Counties called for a national strategy Friday “to invest in the nation’s workforce.”

Ahead of anticipated labor in the near future demands, “It is imperative for all levels of government to come together to support economic recovery in the wake of the COVID-19 pandemic, and the subsequent ‘Great Resignation,’ and the aging of the country’s core infrastructure,” the statement says. Beyond changes that can be implemented within local organizations, the organizations cite a need for Congress “to support employers and address their urgent workforce needs.”

Steps the federal government could take include providing “at-scale investment in our nation’s workforce development systems and programs to invest in skills training to meet employer demand,” and “Increasing legal immigration by raising employment-based visa program caps to expand the pool of qualified individuals for hard-to-fill jobs across our nation’s communities—from truck drivers and heavy equipment operators to agricultural workers, nurses, and engineers,” the statement continues.

Deloitte’s report notes that at least part of what’s driving the labor shortage in the public sector “a shift in worker attitudes,” which are “remaking the workforce, as retiring baby boomers are replaced by Generation Z. The result is a massive shift in what workers want from their relationship with their employer.”

The report identifies five values that could be driving change: A desire for flexibility across all dimensions; “work that works for me”; an emerging entrepreneurial spirit among young workers; a focus on well-being; and a need for purpose and impact from work.

Given this shift—along with the coming “silver tsunami,” an expected groundswell of seniors as the baby boomer generation ages—today’s challenges could worsen “unless government updates its approach to hiring and retention,” the report says. “The oldest members of Gen Z (those born between 1997 and 2012) are now 25, and the youngest are just 10 years old. This cohort will be the target hires for the next decade or more, and their interests are very different from those of baby boomers and Gen Xers, who now occupy most senior roles in government.”

The report outlines a number of steps local government employers can take to make their organizations more attractive. “Government agencies should rethink how they will manage and reward workers using both wage and nonwage incentives that align better with new worker values,” the report says. For example, provide flexibility whenever it’s possible and expand the hiring pool to senior workers. Create a culture of respect and inclusion, and increase compensation. Encourage and empower workers to pursue independent and diverse projects. Offer nontraditional benefits and support workplace mental health. Improve branding and focus on career pathways.

In practice, this can mean permanent remote or hybrid work policies, flexible hours, better health and dental coverage, unlimited paid time off, free meals and employee discount programs, caregiver days and pet-friendly accommodations, and student loan relief.

While there’s a lot of uncertainty in today’s economic outlook, one thing is for sure: “The underlying shift in worker values is here to stay. To remain competitive, organizational workforce practices and policies should adapt to reflect changing worker values and preferences—flexibility, culture, entrepreneurial spirit, well-being, and purpose.”