Can Government Hiring Get Out of the Stone Age?
During the Great Recession years, filling jobs in the public sector was uncomplicated. With unemployment rates high, there was no shortage of applicants. “When we had the downturn, we had no troubles hiring,” reports Rock Regan, the former chief information officer of Connecticut. “We got a lot of people.”
The unstable economy also meant that a huge group of older workers ready for retirement did not step down. The devastating impacts of the stock market near-crash between 2007 and 2009 caused many older workers to defer plans to live on retirement income and benefits.
Today, the hiring situation has been reversed. Although the number of applicants for most public jobs is still relatively high in many states, the national unemployment rate is hovering around 5 percent. That means the number of qualified candidates is shrinking. States and localities are trying to attract new employees by dipping into the same limited personnel pool as other governments and, more notably, the private sector. “When private industry is expanding and the economy is growing, we can’t compete,” Missouri’s then-CIO Tim Robyn told a National Association of State Chief Information Officers’ (NASCIO) conference last spring.
At the same time, the groundswell of retirements is materializing. Men and women who delayed that decision are beginning to leave their government jobs -- ready or not. “You can delay retirement, but you can’t delay aging,” says Neil Reichenberg, executive director of the International Public Management Association for Human Resources (IPMA-HR). “So baby boomers are leaving their jobs one way or another.”
Numbers underscore the openings in government ranks. In its annual survey, the Center for State and Local Government Excellence found that 73 percent of states and localities were hiring -- up from 66 percent in the previous year’s survey. For many governments, the report noted, “there is a sense of urgency about recruitment, retention and succession planning.”
Urgency or not, many governments are locked in antiquated systems and outdated processes that stand in the way of bringing in the best and brightest. At a time when state budgets are loosening their strings and dormant programs are being refreshed, human resources departments are faced with the need to focus on improving their capacity to hire and to retain employees. Many governments are finding that if they want to hire the next generation of public employees, they’ll need to shift from the old ways of doing business.
In the meantime, governments are dealing with the consequences of being unable to hire the most competent people. One effect is that employees are overworked. A number of states are already experiencing that. In Pennsylvania, average overtime costs per employee have gone up 15 percent since 2010. In Arizona, overtime rose about 25 percent between 2011 and 2015.
In some departments, when hiring doesn’t keep up with necessary staffing, it can create unsafe conditions. Corrections departments are a case in point. A study in 2015 by West Virginia’s Joint Committee on Governance and Finance warned that the increased inmate-to-staff ratio “can increase staff overtime and stress levels while reducing inmate and staff communication. This can affect the safety and security of the institution.”
Inadequate hiring protocols can affect economic development. If states and localities are going to attract businesses and citizens, they need to provide services that are competitive with other places. “Minnesota provides great service,” says Ann O’Brien, assistant commissioner of enterprise human resources in that state. “If we don’t get the talent we need to provide those services, then we’re failing.”
Difficulties in hiring depend on a number of variables. If a facility is in an out-of-the-way place -- prisons and rural health-care clinics, for instance -- it’s tougher to find applicants. There are also certain positions for which hiring is particularly demanding, such as with jobs with hazardous working conditions, with a clientele that can be difficult or even hostile, or with irregular hours where employees have to work weekend or overnight shifts.
Additionally, jobs that require very specialized skill sets often remain vacant for a longer period. In the Center for State and Local Government Excellence Survey, hard-to-fill positions included accountants, corrections officers, dispatchers, engineers, firefighters, information technology professionals, mental health professionals, nurses, police officers, public works employees, social workers and water treatment plant employees.
The image of the public workforce has also taken hits, and that doesn’t help with hiring or retaining employees. “Some people are saying that when they go to a party,” O’Brien reports, “they don’t tell people they’re state employees because they’ll be embarrassed.”
Attracting millennials remains a challenge too. By 2025, they’ll make up 75 percent of the world’s workforce, so the search for ways to reach the group has become hugely important. The old approaches no longer apply. “The way people traditionally did recruitment was to throw an ad in the newspaper,” Connecticut’s Regan says. “Now the millennials say, ‘What’s a newspaper?’”
The flip side of hiring is the constant challenge of making sure employees don’t leave. “You can’t talk about hiring without talking about retention,” says Candy Sarvis, deputy commissioner at Georgia’s Human Resources Administration. “We’re just not seeing quality applicants, and to the extent that we find them, we’re not able to retain them.” Turnover rates in her state have been on the rise, from 15.6 percent in 2011 to 18.4 percent in 2015.
Turnover is being pushed, in part, by aging employees. A fast-growing portion of people in mid- and upper-level management jobs are retiring. Delayed by the 2008 recession, they are finally departing the workforce. “We’re no longer on the edge of the retirement bubble,” says James Honchar, deputy secretary of human resources and management in Pennsylvania. “We’re in the midst of it.” In Pennsylvania, about a third of the workforce is eligible to retire in the next five years.
Similar numbers crop up in other states. In Nevada, 44 percent of employees will be eligible to retire in the next three to five years; a third will be in that position in Mississippi in the next five years.
Not only does turnover leave states and cities scrambling for people to fill mid-level positions, it’s also a very expensive phenomenon. According to a recent auditor’s report to the city council in San Jose, Calif., 16 percent of new hires left the police department within two years in the 2005-2007 time period. That number climbed to nearly 25 percent in 2012-2014. Given the significant amount of money a city spends to train police -- in San Jose it’s roughly $200,000 per recruit -- that hike in turnover is costly.
Unsurprisingly, much of the challenge on retention as well as hiring comes down to money. Uncompetitive compensation is one of the biggest issues confronting states in search of new hires. “Starting salaries are too low, and we can’t compete in the market,” IPMA-HR’s Reichenberg says. “We all hear, ‘It’s the people who matter’ -- until budget time and then the people fall to the bottom of the heap.”
In Minnesota, a compensation study found that the 2014 salary for agency heads was $119,517, which was 35 to 69 percent below similar base salaries for the private sector. The state raised salaries in early 2015, but compensation for many agency heads still remained far below market rates. The salary for the commissioner of human services, for instance, was 60 percent below 2014 median private-sector salaries in comparable positions. As a 2013 study on compensation in Minnesota reported, “The bigger the job, the bigger the pay gap with the private sector.”
Beyond a restructuring of the pay scales, states and cities face problems of internal equity. When an entity increases salaries to attract new employees, old employees with the same level of experience end up demoralized if they’re being paid less. But the better new-hire salaries are part of the new competitive environment state and local human resources directors face. “The competition today is a lot greater than it was five years ago,” says Neal Alexander Jr., the state human resources director in North Carolina. “We’ve got to figure out how we can be more flexible in attracting and retaining people.”
That’s certainly true in Pennsylvania: If you’re an agency manager and you want to recruit candidates for a particular job, you can’t. Instead, candidates must first come in and take an examination to get on a general statewide employment list. Then the agency that wants to fill a vacant job must pore through the list and reach out to applicants to see if they’re interested in that particular position. Not only is it a cumbersome process, the lists can hopelessly get out of date; sometimes the applications are as much as four years old. “You can literally get halfway through a list and still not have enough candidates to have a decent interview process,” Honchar says, adding that some of the candidates either “have another job already or they’re not interested in the job you’re hiring for.”
Pennsylvania, along with New Jersey, has among the most stringent civil service regulations in the country. Such rules are a hurdle in other places, too, including California and Illinois. “We have a very antiquated civil service system,” says Honchar. “That’s our biggest impediment at this point. We can’t compete against a noncivil service process that can literally hire on the spot.”
The impact on hiring can be disastrous. Hiring in San Jose, for example, can take as much as 10 months for hard-to-fill positions and an average of six months if the city hasn’t already assembled a list of readily available candidates. Though the city has begun to ease the process, historically it’s taken 53 different steps from the approval of being able to fill the position to hiring the person.
There’s also the simple matter of job descriptions and titles. They’re often hard to understand or simply sound uninteresting -- and certainly unenticing. Only a few years ago, Connecticut and other states finally stopped using common business-oriented language (COBOL) to describe their jobs. They also stopped overdescribing the duties and requirements of the position. As Connecticut’s Regan puts it, “They typically had the kitchen sink written in.”
So what are states and localities to do? One commonsense solution is workforce planning. States and cities that make careful predictions of their employment needs in the future have the opportunity to get ahead of the game through heightened recruitment, optimized retention programs and even enhanced compensation where that’s possible. In Nevada, for example, agency directors are notified when someone on their staff is eligible to retire within the next five years. Armed with that information, they can begin to consider the best route to replacing them, says Lee-Ann Easton, administrator of Nevada’s Division of Human Resources Management.
In Denver, data analysis of retirement and other turnover has been very helpful for some departments, says David Edinger, chief performance officer for the city and county of Denver. By making the budget case that upcoming vacancies will create high overtime costs, departments have been given permission to hire a replacement before someone leaves. That is, they can hire on the statistical probability that the person will be heading out the door in the near future. “This smooths the curve out so as to avoid drops in service levels and overtime,” says Edinger. It’s a particularly effective strategy for a service-oriented department such as motor vehicles.
Having a better idea of what future workplace needs are going to be is a great first step. But actually filling those positions is a different matter. As state and local governments have worked to reform their approaches to hiring, some best practices have emerged. Here are 10 recommendations:
Enhance your benefits. With many pension plans struggling to make sure future benefits will be available, there hasn’t been much talk about enhancing the income employees will get upon retirement. But softer benefits can be very attractive. Nevada’s Easton takes note of a guidance resource program her state offers employees. It’s a form of an employee assistance program. People get free counseling, health advice, legal advice and even help with more mundane services. Easton says she can call the assistance office and tell them she’s having a party for her 75-year-old mom and needs some ideas. “They will research everything and put a package together,” she says. The idea behind it is that it serves the state well to take care of outside challenges that might take an employee away from concentrating on their work.
Loosen civil service requirements. Ranked lists based on testing is fading as a hiring practice, and other inflexible civil service rules are withering away as well. Despite central control of its hiring system, Alabama recently allowed selected agencies to do their own hiring without any state-prepared list. After the direct appointment tool was provided to the state Alcoholic Beverage Control Board, there was a 25 percent reduction in that agency’s overtime costs. “Now it’s so much easier for them to hire,” says Jackie Graham, director of the Alabama State Personnel Department. “They have a pool of applicants and on short notice they can bring them in.”
Kansas is moving even further. Last spring, the legislature gave agencies the authority to hire some people as unclassified -- that is, not subject to civil service rules. In agencies that are taking advantage of various aspects of the new law, employees can elect to forgo civil service protection, often in exchange for a potential increase in pay or a change in job duties. As John Milburn, director of legislative and public affairs for the Kansas Department of Administration, says, “That gives them much more flexibility to utilize their human and monetary capital to carry out their mission.”
Reexamine minimum qualifications. Minnesota’s O’Brien reports that she is looking at the minimum qualifications to make sure that they haven’t gotten out of date. For example, some Minnesota jobs had physical requirements that are no longer necessary, such as the requirement that tax auditors be able to lift boxes of documents. That was important back when tax auditors hefted heavy files to take with them in order to do an audit. Now those documents are available online.
Change your own expectations. Rather than fight the trend among young employees to leave after a short time, there’s a way to embrace it. Denver’s new branding campaign emphasizes the variety in city and county jobs and the idea that working for the city-county exposes people to a variety of different careers.
Grow your own. When there aren’t enough qualified applicants available for a particular job category, governments can start out with unqualified men and women and help them learn the necessary skills. Michigan has a “grow your own” approach in the IT area. Normally an applicant would have to have at least a minimum of a bachelor’s degree for an IT job. Under Michigan’s approach, someone with an associate degree and no experience can be hired in an entry-level professional position. Then, as Matthew Fedorchuk, deputy director of the Michigan Civil Service Commission, explains it, “after two years, they become a fully functioning journey-level professional and if they then finish getting a bachelor’s degree they’ll move to a higher level.”
Recruit online (and not just on your website). “Public-sector HR practitioners consider their own organization’s website the most effective tool for recruiting both millennials and military personnel,” according to the IPMA-HR’s 2014 Talent Management Benchmarking Survey. But Internet tools can go further. The association’s Reichenberg reports that he’s seeing an increase in the use of social media -- recruiters who are on LinkedIn, for instance, and able to go after candidates they spot there. In Denver, recruiters now all have LinkedIn recruiting access.
Another Internet approach that’s catching on: posting short videos that showcase what a hard-to-recruit for job would be like. Louisiana’s civil service, which uses job preview videos, has one where Shalenia Reed, who works as a residential services specialist at a developmental disability center, describes her typical morning. She also adds: “I know I’m touching their lives. I’m making a difference in their lives. I know they love me. I love them.”
Beef up your technology. Not long ago, hiring systems in many states and cities were still fundamentally paper-based. This is precisely the kind of government operation that can be improved dramatically with technology. For example, Minnesota has a new applicant processing tool that will notify people when their application has been received. “Before, they never heard anything, so they felt like [the application] went into a black hole. Now they know where they stand,” O’Brien says. Applicants will also be able to see where their application is in the review stage, and they’ll receive notification if they don’t meet minimum qualifications. The system also asks questions that signal to an applicant that they don’t qualify for a job -- for instance, it might ask, “Do you have a commercial driver’s license?” If the applicant doesn’t, they’ll immediately know that this is not a job they should apply for.
Get serious about interns. Historically, internships have been loosely run programs aimed primarily at offering young people in universities an opportunity to gather public-sector experience. But a growing number of cities and states are now using internships as training grounds for new employees. Jim Smith, Maine’s CIO, has been revamping his intern program so that interns will be chosen as if they were being selected for employment after graduation. “We give them mentors when they come in,” he says. “We make sure they have meaningful work.” The state has been doing this for about two years and over 70 percent of its interns are now going on to become full-time employees.
In Pennsylvania, college students who have completed their sophomore year can do six-month internships (for example, two summer internships or a six-month stint after graduation). “Based on their work experience, they can move right into an entry-level position,” Honchar says.
Focus on military vets. “If there’s an area where governments ought to be developing some sort of strategy, it’s really there,” says Reichenberg of the potential pool of veterans and military personnel as qualified applicants. To tap into that source, Michigan translates how military experience can provide sufficient experience for state jobs. The question, “Are you a veteran?” is asked on every application. Even if an applicant doesn’t strictly meet minimum qualifications, the agency attempts to find a combination of prior military experiences that would indicate the person could do the job. “You might want someone with a bachelor’s degree, but if we find a military veteran who has 10 years of that experience in the military, they can probably do the job and should be interviewed,” says Fedorchuk. “We’re not guaranteeing a job, but we’re making sure their qualifications are reviewed.”
Change the conversation. Governments offer a valuable opportunity for people who want to make a difference, for those employees who want to make their community a better place to live. But too often, public servants get branded as bureaucratic cogs in the government machine. Hiring can reinforce that impression.