It's that time of the year, when new college graduates are job-hunting. Since the recession, the year-to-year increase in the number of new bachelor's degrees has averaged roughly 2 percent. Meanwhile, surveys of private-sector employers show that they plan to increase hiring between 5 and 10 percent each year. That imbalance will continue to push up salaries, making it harder than ever for government to compete in the employment marketplace.
For the foreseeable future, public-sector staffing shortages are inevitable, and the only short-term answer is requiring costly overtime or raising pay levels to attract qualified applicants. In the long run, if hiring new staff remains difficult, public employers need to adopt practices to boost employee productivity.
They also need to pay more attention to the work experience in government. It's been widely reported that new hires are frustrated and dissatisfied by the reality of working in a bureaucratic environment. If the reports are accurate, turnover among recent hires has been high -- and costly.
And whenever a new hiring or pay freeze is announced, it exacerbates recruiting for all public employers. At the federal level, President Donald Trump's announced plans to restructure government make it inevitable that jobs will be eliminated, and if seniority plays its typical role the careers of many recent hires could be cut short.
So it should come as no surprise that millennials' interest in careers in government is falling, as documented in a recent Harvard Youth Poll. In 2012, 31 percent of 18- to 29-year-olds agreed that public service is appealing; this spring's survey found only 25 percent seeing government as an attractive career alternative. That's most likely reflected in the slight decline in the number of public-service majors in recent years.
There may never have been a time when the brand of government as an employer has been worse.
Clearly compensation is a big piece of the problem. Early this year, the National Association of Colleges and Employers (NACE) posted the results of its surveys of projected starting salaries for new B.A./B.S. graduates. Every public employer should become familiar with the NACE website. Here's a selected sample:
Geology/geological sciences: $74,000 Computer engineering: $68,191 Biology/biological sciences: $59,600 Economics: $55,965 Accounting: $54,838 Human Resources: $52,313 Keep in mind that these are averages and do not reflect the caliber of the college, students' GPAs or the industry or location of the employer. The very best graduates can command substantially higher pay. Google, as an extreme example, reportedly starts the typical software engineer at $112,400, plus a year-end a bonus of $16,672 and stock worth $37,333. Facebook is reported to pay similar salaries. Google and Facebook are outliers, but the point is that high-performing companies are willing to pay very well for the best talent.
Compensation levels for new graduates are low at every level of government. For the federal government, average salaries are above the grade and step where new graduates normally start, yet even in Washington, D.C., one of the higher locality-pay areas, the federal starting salary for college graduates is $44,941; in non-urban areas it's $40,684.
The core problem with the General Schedule, the federal pay system, is that it's rigid and focused on internal salary relationships. Many state and local pay systems are just as inflexible. Companies, by contrast, have pay programs that can respond to market trends. If they experience recruiting problems, they can simply reclassify a job to a higher grade.
The tight markets and skill shortages are of course not limited to white-collar jobs. The most severe, based on surveys by the Manpower Group, are the skilled trades.
It's clear that non-competitive pay levels, along with inflexible pay systems, are a core problem for government, impacting both the number and quality of applicants. What can public-sector employers do?
Two basic steps should be routine: a periodic workforce planning review of employee demographics and projected talent needs to identify possible shortages, plus a review of relevant market pay levels to learn where pay is likely to trigger staffing problems. The latter should include unionized jobs even if pay rates are dictated by contract. The goal is to anticipate and develop plans to avoid problems.
It would also be helpful to meet regularly with small employee groups to discuss how the work experience can be improved. The discussions should include concerns with individual supervisors and "people management" policies. The goal, again, is to anticipate staffing problems and provide management with the time needed to consider alternatives. Employees who feel respected and valued are less likely to resign.
Another possibility for mitigating the staffing problem is finding ways to retain the job knowledge of employees approaching retirement. While public-sector retirement plans are often a barrier to innovative work arrangements, there are some steps that governments can take to encourage older workers to continue working and contributing.
Public-sector workforce management practices are too often mired in the past. Financial constraints as well as workforce demographics will eventually force public employers to reconsider organizational configurations as well as entrenched work-management practices. Its already overdue.