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The Agency-by-Agency Strategy Government Needs for Its Workforce Crisis

In the midst of a “skills tsunami,” agencies and their workers understand the problems better than central HR offices do. And workforce planning should focus on local labor markets.

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Worker shortages are not a new problem for public employers. Report after report through the last decade told of staffing shortages, most acutely in public health, law enforcement and education. Today’s worsening shortages reflect the confluence of several trends, including the skills demanded by new technology, the aging population, decades of declining birth rates, COVID-driven retirements, child-care needs and changing worker expectations.

We’ve been hearing for years about the coming “silver tsunami,” the loss of institutional talent as older workers head into retirement. But we also face a “skills tsunami,” in the words of Anu Madgavkar, a senior partner with McKinsey, referring to the capabilities workers are going to need in a time of rapid advancements in workplace technologies like artificial intelligence.

A decade ago, at the end of 2013, across civilian employment sectors there were 4 million job openings and 10.3 million unemployed. Now there are 7.2 million unfilled jobs but only 6.2 million unemployed. Over the decade, job openings in state and local government increased from 298,000 to 746,000.

Add to the demographics the need for new skills, and government staffing is a very different problem than it was a few years ago. These growing shortages confirm that the traditional practice — simply posting job vacancies and waiting for applicants — is no longer working.

Staffing for public employers is best addressed as a local or regional challenge. Given the magnitude of that challenge — worker shortages are creating problems in all government sectors — workforce planning needs to take in not only the needs of government but also the availability of talent; especially important is the regional availability of young people starting careers. And workforce planning needs to make better use of a largely untapped resource: the expertise of workers now on the job.

Staffing is a far more complicated problem for government than for any private employer. It’s the numerous work locations, the variety of occupations, the rigidity of government employment policies and the failure to maintain competitive starting salaries.

The federal government lists 343 “job series” — that’s 343 separate occupations. State and local government workforces encompass fewer occupations, but the number is significantly higher than for any business. The demand for talent in the different fields varies significantly. Tech jobs stand out. Each occupation is best understood as a different labor market.

That overview fails, however, to consider the impact of worker shortages. When jobs are vacant, it creates problems for co-workers and for the public. It causes burnout and turnover. Performance deteriorates. Agencies have been reported with 30 percent or more job openings. That’s a crisis.

Conventionally, the human resources department has been responsible for addressing workforce problems. However, workers understand the problems and want to see them solved far more than a central HR office does. Current employees understand the essential skills and training needs better than HR. They also understand what’s important to colleagues.

That makes teams of experienced workers well suited to develop staffing strategies. Relying on employee teams to address workforce problems is common in higher education. They know what’s needed. It works because the team members are trusted by their colleagues and keep them up to date.

Workforce planning was introduced in the 1970s. Then, it was an in-house numbers exercise that involved tracking worker career progression to anticipate job openings. Until the explosion of technology, jobs and skills changed slowly; job descriptions went unchanged for years.

The planning is much more complicated today. Anticipating future job vacancies is generally the easiest of the planning steps. With government’s many occupations changing rapidly, McKinsey’s dual tsunami will impact each agency somewhat differently. Central HR offices need to rely on affected agencies to take the lead. To prepare for what unfolds, those agencies need to focus on:

• Expected retirements and promotions, the traditional workforce planning work product.

• New skills to work effectively with new technology, supported with training and coaching to make employees productive.

• Understanding the changes needed in the work environment to encourage workers to postpone retiring or quitting to move to new employers. Pay increases are just one element in improving retention; every aspect of the work experience needs to be examined.

• Market pay levels in local labor markets. Pay is at or close to the top priority for all applicants. The days of trading compensation levels for public-sector job security are gone.

• The cost of vacancies. Yes, vacancies save payroll dollars, but there are added costs — the time committed by everyone involved in filling vacancies, training new hires and working with them to make them productive. Where vacancies cause performance problems, it can affect public support.

Rigid, centralized civil service systems are a common barrier to the timely filling of vacancies. The systems lack the flexibility to respond to changing workplace developments. Following the federal lead, as with agencies like the Securities and Exchange Commission and the Federal Aviation Administration, a proven solution is allowing agencies or occupational groups to develop separate personnel systems. It’s worked for police and teachers for over a century.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
A consultant focusing on public-sector pay and performance
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