Skip to content
Agency Operations

Innovations for local and state governments to attract and retain workers

Natalie Runyon  Director / ESG content & Advisory Services / Thomson Reuters Institute

· 6 minute read

Natalie Runyon  Director / ESG content & Advisory Services / Thomson Reuters Institute

· 6 minute read

How can state and local governments, which are facing a talent crunch due to numerous workplace trends, attract new workers and retain the best of the ones they now have?

When employees leave state and local government jobs, they often cite retirement, advancement at another public employer, and a lack of competitive compensation as the top reasons for leaving, according to their exit interviews.

Likewise, when HR Directors at state and local governments were asked about the competitiveness of their compensation and benefits packages, 92% say that the benefits package is competitive, yet just 60% say that the compensation offering is competitive, according to the same report.

Today, major generational shifts are happening that immediately impact government agencies. With Baby Boomers retiring, there is a major loss of institutional knowledge within many agencies; and Millennials currently make up just 27% of the public workforce. Clearly, public employers need to make investments in talent attraction and retention now.

With the ongoing labor shortage driving up compensation, it is unlikely that public sector employers are going to be able to compete for talent on compensation alone. This means that state and local government employers need to get more creative in order to attract new recruits and retain existing employees. Here are several examples of what the most innovative public employers are doing:

Developing the employer value proposition

Public employers should outline what they want to be known for in the marketplace. For example, do you want your agency to be known as one that highlights employees’ work/life balance or focuses on the job’s purpose and impact? Do you want a workplace that can be depended on to promote veterans’ transitions or the re-entry of mothers? Or, do you want to offer strong career advancement and development and stability and security?

To start the process, the hiring professionals within these agencies should ask their long-time, most productive employees why they stay. Then, analyze the employee experience through the lens of a productive, engaging, and enjoyable work experience. Next, understand the experience your competitors are offering, and engage in a social marketing strategy through story-telling to communicate your agency’s unique value proposition. Indeed, public sector candidates interact with prospective employers an average of 7.4 months prior to being hired.

For example, the state of Indiana used social channels on LinkedIn page to triple the level of prospective candidates’ awareness of available positions, according to LinkedIn.

Remember to highlight purpose and meaning in your social narrative. For a public service job to allow an employee to contribute to something larger than oneself is a big reason why employees choose their jobs and stay with their employer across generations. Because serving the public needs is the mission of the local and state government, highlighting purpose is a logical first action to take to attract and retain employees.

Getting creative with the value of employment

To compete with private sector, government agencies should consider these innovative ways to increase the value of employment:

  • Quantify the total value of compensations and benefits — Often, the true cost of each full-time employee is not well known nor appreciated between employer and staff alike. However, by adding up and marketing the total value of each position’s salary, bonus, health insurance, and other benefits is a way to compete against the larger compensation packages offered in the private sector. For example, if a public sector employer offers pensions for retirement, the guaranteed income over decades of retirement can be valued in the hundreds of thousands of dollars.
  • Offer expanded benefits and perks — There are many options for modern perks, and some of the most innovative employers can tout some of these, such as holistic health and wellness coverage, pet insurance, home office allowance, subsidized or discounted rates for child and elder care, and more. However, rather than guessing which perks employees may want, employers should ask them. By surveying employees, public sector employers can avoid the one-size-fits all approach and find out what perks are most desired.
  • Create specialty debt payoff programs — Over the last two years, the pandemic adversely impacted the financial security of government workers. Indeed, 41% of participants in a recent survey indicated that the pandemic left them worse off financially, including a decrease in funds put away for retirement and an increase in the use of emergency funds and debt to make ends meet. As an example of this type of specialty payoff program, one employer got creative and offered unused paid time-off to repay employees’ student debt.
  • Develop your employer value proposition — Agencies should outline what they want to be known for in the marketplace. To start the process, they should ask long-time existing, most productive employees why they stay. Then, determine how best the agency can replicate that experiences through the lens of productive, engaging, and enjoyable work.

Modernizing feedback collection to promote employees

The use of employee and employer feedback is an often underused tactic to help retain key employees. Some of the ways the public sector employers can retain their most valuable employees by leveraging feedback, include:

Conduct “stay” interviews — In today’s competitive labor market, employers more than ever need to keep an eye on how employees, especially high performers, are feeling. Stay interviews, which help managers understand why employees stay and what might cause them to leave, are a mechanism for doing so.

During these less-than-30-minute conversations, managers ask standard, structured questions in a casual manner. Asking certain questions can help employers understand what are the specific aspects of each employee’s role and workplace that keep them engaged, what are each employee’s career and life goals, and how the manager can support each person in achieving them. Further, these interview may shed light on what factors might tempt certain employees to leave.

Upskill existing employees by investing in digital professional development — One of the top factors of employee retention is the availability of learning opportunities. With many options of online learning platforms available to employers, it’s relatively easy for employers to invest in upskilling and offer a plethora of options for skills development for their employees. For example, the state of Missouri improved employee satisfaction by 54% by investing in LinkedIn Learning for its employees.

Promote and hire by valuing “power skills” over technical skills — To meet the agility demands of knowledge workers today, power skills, such as self-awareness, and understanding power dynamics, collaboration, leadership, communication, and cultural competency, are often the unspoken requirements for high-performance team culture.

These skills are critically important for today’s employees, from Millennials to Gen X to Baby Boomers, and any who rate purpose and meaningful work as top factors when considering a job at a government agency or public sector employer.

More insights