The first couple months of the year have been a mixed bag for the public workforce. In January, state and local governments recorded the worst jobs report in over a year, shedding 17,000 jobs; and in February, they rebounded and added 19,000 jobs. A majority of the losses and gains were in higher education, but most state agencies and departments across the country are looking to increase their payrolls in light of rebounding tax revenues.
Governing reported that an International Public Management Association for Human Resources survey found that more than 66 percent of respondents (from both state and local government) intended to hire in fiscal year 2014, up from 61 percent the previous year. A vast majority surveyed anticipated pay increases, while nearly 40 percent thought benefits might improve.
With states seemingly turning the corner, I asked the National Association of State Personnel Executives' (NASPE) executive director, Leslie Scott, what public employees should expect in the coming year. Her responses are edited for clarity and length.
There's a lot of talk about hiring, but is it actually happening outside higher education?
I think there is some hiring going on, and for the most part, it's very focused on social workers, caseworkers and general public safety type of things. They're hiring a mix of workers. A lot of times states really just need people on the ground. That's not to say that they don't understand that they need managers to oversee those issues, but they get more funding for caseworkers and those kinds of things than managers.
What are states doing for their existing employees?
States really are trying to take care of employees that are there -- some with salary increases, though for the most part what we're seeing is still very modest. But there is at least an attempt to give increases to employees that haven't seen them in a good number of years. This is particularly important as employees have been asked to contribute more to their pensions and health insurance. But even with pay increases, employee take home still isn't what it was.
Will states be looking at their nonsalary benefits?
One of our top five issues for the year is total compensation. States are looking at the total compensation they're giving and all the benefits involved and looking to see whether that model is appropriate as newer, younger employees are being hired. Most of these employees are looking at the cash benefits, particularly if they're burdened with student loans. So states are really looking at that model and seeing if it needs some adjustments.
The other thing states are reconsidering is pay-for-performance and how you deliver that when sometimes it isn't funded. States are trying to decide whether pay-for-performance is an across-the-board raise for folks that have met minimum qualifications in a performance appraisal or if it's really taking money and rewarding your very, very top performers.
There could be some adjustments to the contributions states are making to health insurance and retirement accounts, but it really depends in some places on what the collective bargaining agreements are. A lot of things are on the table this year, but states want to make decisions pretty methodically.
When budgets get cut, training is often one of the first things to go. After so many years of recession, are states starting to look at investing in the performance of their employees again?
Some states are. I think the need has been identified. A lot of the middle manager positions were either eliminated during the recession or they weren't developed. So everybody is looking at the next few years when this retirement tsunami is really going to happen and they're finding that there's a very small pool of middle managers who've been developed enough to take on those maybe even greater roles that are going to be vacated. So there's a real push to look at that and do some leadership and development training.
Who's leading the pack in terms of revamping its workforce as states continue to climb out of the recession?
Tennessee is in the middle of some compensation studies. They're also really focused on training and developing their employees right now. They really have a focus on competencies and skills and in turn what they're hoping is that they will have top performers that they can reward and undertake a long-term approach to recruiting and retaining high performers. Tennessee did some reform to their civil service that they're really implementing now by training and doing more specialized recruitment that they hadn't done before. That's been exciting to see.
Louisiana has really worked on their performance management system and really gotten to where they want to do more pay-for-performance appraisals. Pennsylvania is doing a lot of leadership development -- that's one state that really kept training going when other states didn't.