Government's Core Staffing Problem: Inflexible Pay Systems.

• Author: Risher, Howard

Competition for talent is going to intensify.

Government needs new approaches to how it compensates its workforce.

A recent National Association of State Chief Administrators (NASCA) report ("Job One: Reimagine the State Government Workforce," available at Accenture.com) concludes that "as the public and private sectors battle for talent, government is falling too far behind in preparing for the workforce of the future." One statistic from the report suggests that the public sector is already well along the way to losing that battle: Since 2013, job applications submitted to state agencies have declined by 24 percent.

The aging government workforce makes the challenge particularly acute for government. According to the most recent data, 30.9 percent of the public-sector workforce (excluding law enforcement and other public-safety occupations) is age 55 or older, compared to 23.1 percent in the private-sector workforce.

Looking to the future, the projected increases in demand across occupational groups in which government must compete directly for talent shows that public-sector staffing problems will become more complicated. According to the most recent Bureau of Labor Statistics projections, from 2016 to 2026, the U.S. workforce will have grown to 168 million, an increase of 11.5 million, or 7.4 percent. But for the computer and mathematical operations occupational group, the increase will be 13.7 percent --nearly double the overall growth rate --and the projected increases are even larger for occupational groups with significantly larger employment numbers: 15.3 percent for healthcare practitioners, 23.6 percent for healthcare support workers, 19.1 percent for personal care and related service occupations, and 14.5 percent for community and social service occupations.

With rare exceptions, these high-demand jobs require education and training beyond high school. That intensifies competition for the best-qualified job seekers. While the NASCA report calls for "significant change and modernization at every phase of the employment lifecycle--from recruitment, hiring, and onboarding to training, development, and retention"--it nevertheless concludes that the inability to offer competitive salaries is the biggest barrier to attracting qualified talent, by a large margin.

But there's more to the challenge of meeting government's staffing needs than simply increasing salaries to be more competitive. A subtle and deeply entrenched problem is the...