The challenge of building the workforce government needs.

• Author: Kellar, Elizabeth K.
• Position: Commentary

State and local governments are hiring again, but they're having difficulty finding--and retaining--the right people. Do governments have a people problem?

In the Center for State and Local Government Excellence's latest annual workforce survey (available at www.gfoa.org/workforce), government human-resources managers cite staff development, succession planning, employee morale, and retaining staff for core services as their top issues. Those issues were rated as greater concerns than compensation and health-care and retirement-plan costs. What's going on?

Some of the problem is the mismatch between the skills of people looking for work and the jobs that need filling. Whether governments are looking for finance experts, managers, engineers or public-health professionals, they face stiff competition from the private sector.

Add to that the fact that more local and state workers are heading for the exits as they become eligible for retirement. While many stayed in their jobs as the economy slowly recovered from the recession, they are now retiring in large numbers. The center's survey finds that 22 percent of retirement-eligible employees accelerated their retirement date in 2013.

Recruitment challenges have been a shock to communities that see themselves as highly desirable places to live and work. As one North Carolina local government manager told me, "It takes a lot of time to fill senior positions--sometimes we have to go through the recruitment process three times." She speculated that the housing market and two-career family dynamics were making it more difficult for people to move.

A legacy of the recession is that more governments are hiring contract or temporary employees to fill positions (one third reported doing so in 2013, according to the center's report). The rise of this independent workforce is significant for both the private and public sectors. Will these workers be able to accumulate adequate retirement savings? If not, they may have to turn to government for social services when they do retire.

One reason that governments may be relying more on temporary or contract workers is to manage their overall compensation costs. Although employees in many state and local governments saw no pay increases for three or more years in the wake of the recession, the costs of health insurance and defined-benefit pensions have continued to grow. In 2004, those benefits made up 16 percent of employer costs for public workers'...