Report: Need for public financing talent outpacing the number of candidates available

The public financing sector is facing a workforce crisis: The need for talent is growing faster than the number of prospective candidates available, straining resources and pressuring the talent pipeline beyond what it’s capable of, according to a new report from the Government Finance Officers Association.

“The gap is growing because while state and local public finance is experiencing very strong demand for workers, it has seen net employment loss each year since 2019,” reads an opening explainer included in “Meeting Demand for State and Local Public Finance Jobs,” a report produced by the finance organization last month. “As other sectors have reversed the employment losses induced by the Covid-19 pandemic, state and local public finance—like the public sector overall—has not.”

Specifically, there are 30,000 fewer people working in state and local public finance than there were before the pandemic. Demand growth in public financing has outpaced its private sector counterpart, and the broader economy, the report says. Online job postings are up 92 percent in the first half of this year (over the same period in 2019), while they’re up about 60 percent in the private financing sector, and 41 percent for the public sector overall.

Pre-pandemic, Chris Morrill, executive director of the Government Finance Officers Association, said most of his conversations with organization members centered around new statements from the Government Accounting Standards Board, funding pensions or the impact of revenue constraints. 

“Since I have been back on the road post-lockdown, though, the number one challenge I constantly hear about is attracting and retaining talent—and I’ve heard it described as a crisis for government finance more than once,” Morrill said.

There doesn’t seem to be relief on the horizon.

As the public financing workforce ages, impending retirements are expected to further exacerbate shortages into the foreseeable future, particularly in the northeastern United States. The report highlights that “Nearly a third of incumbent state and local public finance workers will be retirement age within ten years. The current workforce includes nearly 50,000 workers who are of retirement age today.”

As managers scramble to increase recruitment to make up for the lost employees, there are several particularly challenging hurdles that stand in their way.

Among them the challenges career progression in public sector financing has a seemingly low ceiling, as there aren’t as many managerial positions when compared to the private sector. That’s because public finance falls under the oversight of government organizations. This means that, while there might not be as many direct managerial positions available, there are other benefits for those looking to climb the ladder. A statement from the Government Finance Officers Association about the findings notes that “state and local public finance work is a good stepping-stone to other areas of leadership, such as city manager or county manager positions or as leadership roles in the departments they serve, such as public works, police, fire and others. This latter fact can be highlighted early and often throughout public finance careers.”

There’s also more equity in public finance, which can be highlighted when recruiting. Women make up 61 percent of the public financing workforce, the report notes, compared to 45 percent in private financing, and 55 percent in the public sector overall. Likewise, people of color make up 38 percent of state and local finance organizations, compared to 28 percent in the finance sector as a whole.

To help meet the increasing workforce demands, the report outlines a number of recommendations that administrators can take.  For one, as communities receive an unprecedented amount of federal dollars to aid in COVID-19 relief efforts, administrators can highlight the importance of public finance as it relates to managing that money. And unique to public finance, there are many good and well paying positions that don’t require a bachelor’s degree.

Administrators should “evaluate where a bachelor’s degree can be removed from job requirements” to reach more potential candidates, the report continues.

Finally, the report notes, organizations can “Accelerating the hiring process where feasible and expanding the talent pool for new candidates—including by tapping into adjacent talent pools in private sector finance and federal public finance. The report also recommends compiling and sharing best practices around recruiting from talent pipelines that are diverse in race/ethnicity, gender, and age.”

For more information and to view the report in its entirety, visit the Government Finance Officers Association’s website.