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Total rewards: Building a stronger, more sustainable public workforce
Without taking immediate action to address certain hiring challenges, the public sector workforce will continue to experience burnout and negative mental health impacts, resulting in even greater impacts on employee turnover and productivity.
4 Min Read
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Thanks to the Great Resignation, the high retirement rate among Baby Boomers, and an inability to attract the next generation of younger workers, the public sector continues to face significant challenges in hiring and retaining talent.
State government employment only reached pre-pandemic levels in January 2023, while local governments took until December 2023 to fully recover. This recovery period starkly contrasted with the private sector, which achieved a quicker rebound. The challenges that led to a slower recovery for the public sector, included budget constraints, slower hiring processes and lingering effects of the pandemic on public services.
Without taking immediate action to address these hiring challenges, the public sector workforce will continue to experience burnout and negative mental health impacts, resulting in even greater impacts on employee turnover and productivity.
To understand the current state of employee satisfaction within the public sector, Purchasing Power, a voluntary benefit company that offers an employee purchasing program and financial wellness resources, recently conducted its second annual Public Sector Financial Wellness Survey. By understanding the current sentiment among public sector employees regarding job satisfaction and total rewards, HR leadership can take immediate action to better support the workforce, improve retention and ultimately support organizational success.
The state of the public sector employee workforce
According to Purchasing Power’s research, overall sentiment among public sector employees remains high, with most enjoying their roles (79%). Yet nearly a quarter are keeping their options open to other industries, wary of economic volatility and labor shortages. In fact, approximately half of the workforce reports being impacted by the labor shortage, with 51% being asked to handle multiple jobs at once. Plus, some (22%) only work overtime at regular pay.
What’s even more significant is the research found that 48% of employees have less than $500 in emergency savings, numbers notably lower than the three to six months of savings that financial planners recommend preserving in the event of unexpected expenses, such as emergency home repairs, medical bills, car repairs and major appliance replacements, among others. With minimal emergency funds available, it’s not surprising that fewer than half believe their employer cares about benefits that address their financial wellness and immediate needs, and more than a quarter are dissatisfied with their employer’s benefits options.
Total rewards as a strategic workforce investment
The benefits landscape has made vast strides over the last few decades beyond traditional retirement savings accounts and health care insurance plans, such as offering caregiving benefits, fertility services and even letting employees tailor packages to meet their needs. The evolution of benefits has thrusted total rewards to the forefront, with 90% of public sector employees citing benefits as equally important to salary. To retain employees and meet their needs, it’s vital for HR leadership to align total rewards packages accordingly.
The research uncovered additional benefits organizations should consider offering. Of the benefits not offered, public sector employees report they would be most interested in including low-interest installment loans (25%), a student loan repayment benefit program (20%), earned wage access (19.5%), bill payment programs (19%), medical deductible financing (18%) and an employee purchase program (17%). While budget may factor in what can be offered, HR leaders should consider low or no-cost benefits as a starting point.
Take action
Purchasing Power’s findings point to a clear need for public sector employers to attract, retain and nurture a workforce who feel valued enough to stay long-term. This is especially important as the age of retirement increases and younger workers bring a new set of expectations into the workplace.
Here are a few key areas where employers should invest valuable time and attention:
Provide a broader selection of benefits, which can help stem turnover, keeping employees firmly rooted in the industry.
Broaden the range of benefit offerings to provide help with employees’ short- and long-term financial wellness and well-being by including voluntary benefits such as employee purchase programs, which are available at no additional cost to the employer.
Minimize the impact of labor shortages by counterbalancing longer working hours with an increased array of competitive benefits.
Help employees focus on an improved work/life balance by considering flexible hours and/or remote work options.
With the right insights and resources, HR leaders can make a real difference in the lives of their workers. Coupling these findings with open, honest conversations between leadership and employees will help create a conducive environment for regular feedback and improvement, improving employee satisfaction, talent retention, and overall organizational success.
The full findings and insights of Purchasing Power’s 2024 Public Sector Financial Wellness eBook can be accessed here.
