State governments and the coming talent shortage

Competing—successfully—for talent in the public sector

Economic recovery is a welcome trend in US state capitals but it brings a downside: Now more than ever, state HR departments are wrestling with increasing talent shortages and the ongoing challenge of competing with private employers. As baby boomers retire, and millennials, technology, and globalization reshape the workplace, state employers can win hearts and minds—with a bit of creativity and some thoughtful planning.

Quick wins in tight talent markets

Competition for talent is escalating quickly, but state HR teams can take concrete steps now to establish the right staffing mix for the years ahead. As the talent shortage gains momentum, you can:

Prepare for change with your existing workforce: When baby boomers retire, they don’t simply leave an open headcount, they take huge amounts of information with them—knowledge, understanding, and experience with daily operations, plus valuable historical perspective. Minimizing the shock of the baby boomer exodus is not only about talent acquisition, it’s also about a very considerable amount of knowledge transfer.

Consider the full range of options for filling talent gaps: When you can’t meet a need with your internal talent pool, consider all sources of available talent. Decide which roles truly require full-time employees, then leverage other options for remaining work.

Get creative about talent attraction and recruitment: Without a doubt, the public sector starts at a disadvantage and can now be in danger of lagging even farther behind the eight ball on recruiting. It’s past time to get creative, particularly with millennials.

Modernize everything about talent engagement and retention: Most states are overdue for a cultural and infrastructural overhaul to meet expectations of today’s workforce for work environment, flexibility, and opportunity.

Take a close, hard look at existing roles: Now is a great time to reassess your org structure and look for efficiencies. Because reorganizations typically involve layoffs, they are naturally met with resistance, but departing baby boomers present an opportunity to reshuffle the deck without RIFs.

Why a statewide, holistic talent strategy may be your best bet

On a larger scale of change, state HR organizations should at least be considering some level of centralization and consolidation to establish a “brain trust” that will help the state compete successfully for strong talent.

Think at the state level: A central talent organization can roll out a consistent, easier-to-manage talent strategy that benefits all areas of state administration and reduces duplication of effort. The state itself can be positioned as the employer of choice, by extension providing a critical boost to talent efforts throughout all state agencies.

Think ahead (way ahead): The sooner talent gaps are identified, the better your chances of bringing in the right candidates to fill the need before it becomes urgent. States need to be looking beyond the one-year mark and establishing much longer term strategies and plans.

Why now?

Many factors are at play in the tightening talent market, but some are particularly relevant for the public sector:

Baby boomers leaving the workforce en masse: Baby boomers forced to postpone retirement during the 2008–2012 recession are now past ready to go. Public service has historically attracted people interested in earlier retirement, so public service will be hit hardest by the sudden loss of talent and historical institutional knowledge.

Perennial challenges of competing with the private sector: The recession drove more people to the relative safety of public sector jobs, but now that the economy is improving, talented employees in the public sector are more likely to leave if they find a better offer.

Widening gap between education requirements and required job skills: Programs to promote dialog between employers and educators are helping align academic curricula with talent requirements but qualified candidates are still in increasingly short supply, accentuating talent shortages.

Fewer graduates from India and China opting for US employment: Over the past 10 years, economic growth in China and India has spurred employment opportunities in those countries. Talented graduates who might have looked to the United States for suitable employment in the past now have attractive options in their home countries.

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