I get a kick when politicians say they are going to create jobs when there are so many jobs out there now, just not enough people to fill them.
In the public sector, this is really going to hit home in the next 3-10 years, when the tail end of the baby-boomers reach the age of retirement, or 65. When I ask local government leaders what percentage of their workforce will retire in the next decade, they tell me at least 30%, which could even be low. Those who can retire with a pension at age 55 for example, will not stick around to 65; but some of them will continue to work post retirement as 1099s or will part time it at another local government due to the shortage their leaving has on the overall public sector workforce.
The problem is exasperated because there aren’t enough people available to backfill these positions – partially due to a lack of interest – but also due to workforce age demographics.
The last year of the baby boomer generation was 1964, which today means those people are 52-53 depending on their birthday. That means in 13 years, the boomer population will have achieved age 65, and for all intent and purposes, will be out of the work-force altogether.
The generation behind them, Generation X, is about half the size of the boomers and spans 1965 to the early 1980’s(1) so let’s call “X” a 20-year generation. The problem is, these people are settled in their careers, and excluding occasional job changes, will not be available to back-fill the positions left open in the public sector once the retirements pick up.
The leading edge of the millennials, those in their early to mid 30s, include many highly educated young professionals who are making career tracks in many different sectors. The millennials behind them, age 29 to their late teens, are more technical than most, have a different set of interests, skillsets and work ethics. They are also not coming out of college with hands raised for a career in the public sector. Compensation and benefit plans, including pensions won’t do much to attract young people into government administration jobs. Quite frankly, I would even argue that most young people don’t even know what a pension is. They tend not to look that far down the road when searching for work, and statistics show that 91% of millennials switch jobs in the first three years. They are not truly focused on “career” when they come out of the gate.
You can already see this dynamic taking shape in the public sector, starting with what I’ll call the skill positions. If you need a new CFO, assessor, business manager, superintendent or city manager, job searches pull people from other communities. Recruiting a skill position candidate from another community will cost you $10-50,000 more than what you were paying before, and the vacuum created in the other community will cost them more to fill, e.g., expense escalation. This “resource churn” benefits the employees who are job switching, who are usually exempt from long-term retiree benefits. Unless the public sector starts to attract new talent into its resource pool, this cycle will worsen.
What does one do?
The obvious thing is to create partnerships with local universities known for their political science, public administration and accounting programs to try and engage students early. But the longer-term solution must be focused on creating efficiencies, including using data and technology to save man-hours. The ability to lessen the number of man-hours required to do a job is critical. We’ve seen this in the private sector, manufacturing more specifically, where machines and technology have increased output while lowering costs. If you can find ways to do job-sharing, collaborations with other local governments, consolidate functions or even rely on one another to spread overhead and workflows across a broader distribution, now is the time to begin! Succession planning is also a key element to the equation, and focusing on the core services you must deliver is also paramount. You will not have the luxury of spare heads to do non-core essential work in the near future.
Every minute counts
A minute here and a minute there…soon you save a few hours and hours turn to days and before you know it, you’ve save significant time. Every 2,000 hours saved is a Full Time Equivalent; but also, one less person you will have to rely on to deliver core services. I’m not suggesting you use this philosophy to reduce headcount today, but realize that there will be fewer replacements available in the not-so-distant future, so make sure you agree on what your core services are (or should be). For schools, their core service is education, so they need teachers!
Once the core is determined, jettison non-core functions, or those that can be performed by third parties with a high level of quality and in a more cost-efficient manner. For school districts, this could even be to their municipal counterparts. Municipalities, for example, do a better job of plowing snow or cutting grass than do school districts. Delhi Township has been cutting Holt Public Schools grass for 40 years in a win-win relationship.
Thomas Stallkamp, a big shot at Chrysler when I was cutting my teeth in the auto-industry once said, “If I can find something we do in the yellow pages, and can buy it at a price and quality level I’m happy with, I’d rather manage it than own it.”
I guess that was the advent of outsourcing. If my theory is correct, what we will face in the public sector should allow us to redefine the word outsource to:
• A business tactic that uses the resource strengths of others to provide economies of scale to those who are resource challenged
For the foreseeable future, we can’t expect the millennial and Gen Z populations to be our silver bullet. Plus, we don’t have the luxury of time on our side.
What do you think the future holds?