HOWARD RISHER<\/a><\/span>[\/et_pb_text][et_pb_text disabled_on=”on|on|” _builder_version=”4.16″ text_font=”PT Serif||on||” text_text_color=”#363636″ text_font_size=”16″ text_line_height=”1.4em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” max_width=”140px” module_alignment=”center” custom_margin=”10px||60px|” global_colors_info=”{}”]Howard Risher has 40 years of experience as a consultant and HR executive with clients in every sector.\u00a0He has published frequently in HR journals and websites.\u00a0 He is the author or co-author of six book and a growing list of ebooks. The most recent is\u00a0Building the Workforce Government Needs.\u00a0\u00a0He is associated with Grahall Consulting Partners.<\/i>[\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.21.0″ text_font=”PT Serif||||” text_text_color=”#363636″ text_font_size=”24″ text_line_height=”1.5em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” max_width=”720px” custom_margin=”0px||0px|” custom_padding=”||0px|||” hover_enabled=”0″ text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|tablet” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\nThe data make it clear: the U.S. has a worker shortage problem.\u00a0 Employers, public and private, have been unable to fill job vacancies.\u00a0 As the New York Times reported in late July, \u201cnearly every public-sector employer across the country is in a hiring crunch.\u201d \u00a0Significantly, virtually every industry is reporting vacancy rates almost twice as high as a decade ago.\u00a0 U.S. News reported, \u201c. . .some US industries [are] desperate to hire.\u201d\u00a0<\/p>\n
To date, the reports from public agencies are sketchy; although the problems have been the subject of media reports, few public employers report summary data on job vacancies.\u00a0 The words \u201ccrisis\u201d and \u201cdangerous\u201d are often used in the reports. \u00a0When vacancies mount and jobs remain open for weeks and months, the costs are high \u2013 burnout, high turnover, deteriorating performance, and diminished public support. \u00a0<\/p>\n
Of the many problems vacancies create, the flight cancellations and delays have gotten the most media attention.\u00a0 Here both public and private employers are involved.\u00a0 There are not enough pilots, mechanics, and cabin crew as well as not enough Air Traffic Controllers.\u00a0 The FAA states the agency needs 3,000 more ATCs.\u00a0 CBS reports the delays \u201c. . . could continue for a decade . . .\u201d<\/p>\n
The headlines make it clear \u2013 the shortages are a problem in every industry.\u00a0 One of the hardest hit sectors is healthcare. U.S. News reported \u201cStaff Shortages Choking U.S. Health Care System\u201d. \u201cThe construction industry is facing the highest level of open positions ever recorded, a shortage of roughly 650,000 workers.\u201d The trucking industry is \u201cheaded for a shortage of 160,000 drivers by 2030\u201d; U.S. manufacturing \u201cFaces a 2-million Worker Shortage\u201d; \u201cIn Retail: Labor Shortage Will Get Worse\u201d; even in banking, \u201cLabor shortage in banking will persist long after pandemic subsides\u201d.\u00a0<\/p>\n
For public employers, the problems are most severe with jobs that involve stress and unpleasant or dangerous working conditions. \u00a0Many of the high vacancy jobs require regular attendance at a work site and\/or personal risk.\u00a0 Prisons, police, hospitals, road crews \u2013 all report record shortages. The most recent reports highlight vacancies in 911 call centers.\u00a0 Those jobs of course are vital to the public.<\/p>\n
Additionally, the COVID crisis and working remotely have triggered important changes in the country\u2019s labor markets.\u00a0 Employees now have different interests when they look for a better job.\u00a0 As a Forbes column argues, \u201cFlexibility is top of candidates\u2019 wish list . . . \u00a0Working at home gave them \u201cmore time for themselves and their family, and they don\u2019t want to give that up.\u201d \u00a0It\u2019s now a \u201csellers\u2019 market\u201d and job seekers know that.\u00a0<\/p>\n
The Media Reports Overlook a Key Issue:\u00a0 Demographic Trends<\/h4>\n
Staffing problems got little attention prior to the COVID crisis but the trends started as far back as the 2009\/10 recession.\u00a0 Five years ago, a business column discussed \u201c12 Industries That Desperately Need Workers.\u201d A CNN Business headline from 2018 read: \u201cAmerican businesses can’t find workers.\u201d<\/p>\n
The core issue is two demographic trends: Declining fertility rates and Baby Boomers ageing and retiring. In 2001 the entry-level talent pool (ages 20-24) was 14.6 million.\u00a0 In 2021 it was 14.7 million while the U.S. workforce increased by almost 20 million.\u00a0 Over that period the Baby Boomer workforce (ages 55 to 64) increased from 15.1 million to 27.1 million in 2021.\u00a0 The number deferring retirement and continuing to work after 65 increased from 4.4 million to 15.5 million.\u00a0<\/p>\n
In 2009 there were 6.5 unemployed workers for each job opening.\u00a0 Employers, including public agencies, could simply post job openings and wait for applicants.\u00a0 But the ratio began to decline, dropping to a low 0.8 in early 2020. It jumped dramatically when workers lost their jobs in the COVID crisis, climbing to 4.9 workers per job opening.\u00a0<\/p>\n
With end of the pandemic, when employers started hiring, the ratio fell to a new low 0.5 \u2013 one worker for every two job openings.\u00a0 That is a key to the current shortages. \u00a0The U.S. does not have enough workers looking for work to fill the open jobs.<\/em>\u00a0 Data posted by Moody\u2019s and others show there will be shortages for years.\u00a0 Agencies cannot afford to ignore that in their planning.<\/p>\nAnother Key Issue:\u00a0 The Model for Public Pay Was Not Planned to Compete for Talent<\/h4>\n
For government, a frequently voiced contention attributes staffing problems to salaries that are too low.\u00a0 That may be true as a generalization but when the basic salary management model was developed early in the 1920s, the idea was not a consideration. \u00a0For the next half century, workers were hired soon after graduation and stayed with the same employer until they retired.\u00a0 Employers, public and private, could post job vacancy announcements, then sit back and wait for applications.<\/p>\n
Of course workers want to be paid, as a union leader stated years ago, \u201cmore\u201d but unions have resisted replacing pay systems.\u00a0 For a quarter of a century after World War II both public and private employers relied on rigid salary systems, with pay increases based on rising living costs. \u00a0The goal was to maintain \u201cinternal equity\u201d.\u00a0 Jobs were classified based on predefined grade descriptions.\u00a0 Market trends were not then an issue. \u00a0<\/p>\n
To focus on a prominent example, the administration of the federal GS system, the pay of white collar workers is never compared with the pay for similar jobs in the private sector.\u00a0 Starting salary data, the key to attracting applicants, are never considered. The Bureau of Labor Statistics pay surveys are not intended to report \u201cmarket pay\u201d information. Jobs classification is based on the same logic adopted in 1948. When engineers are classified and paid in the same grade as librarians, it\u2019s obviously contrary to the way the jobs are paid in the labor market.\u00a0<\/p>\n
That continues as a common program model for state and local government pay systems.\u00a0 Many continue to rely on similar policies and methods (e.g., step increases, job classification).\u00a0<\/p>\n
The typical private sector pay system is very different.\u00a0 The changes started after the 1990 recession when \u201cknowledge\u201d jobs (e.g., IT specialists) became prominent. In other sectors employers now rely on surveys that provide starting salaries along with market averages for \u201cbenchmark\u201d jobs to determine grades and make annual adjustments.\u00a0 Businesses, hospitals, and colleges all rely on similar practices.\u00a0 There are over a thousand surveys conducted in every industry and geographic area.\u00a0 It\u2019s a simple and logical philosophy. Many surveys would be available to public agencies if they chose to become participants.<\/p>\n
The key point — It\u2019s rare to find a public employer at any level that tracks and tries to compete with named private sector employers (similar, that is, to the way hospitals compete with hospitals, and banks compete with banks).\u00a0 Very few public employers adjust salaries annually to match private sector salaries.<\/p>\n
Government, however, has a far more complex problem than the typical company.\u00a0 The competition is not limited to other similar jurisdictions.\u00a0 The practical problem is that many occupations have their own defined block of competing organizations.\u00a0 Healthcare agencies compete with employers of healthcare specialists. Accounting departments compete with other local employers with similar accounting jobs.\u00a0 Technology departments compete with employers that compete for the same tech skills. Government needs to compete in those specialized markets but also offer attractive opportunities for workers in the fields unique to government (e.g., prisons, social services, parks and recreation, etc.)<\/p>\n
Both state and local jurisdictions now need to compete in several, very different labor markets. The common program model was adopted before that was true.\u00a0 That creates more complex compensation problems than a typical private employer.<\/p>\n
[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.16″ background_color=”#f7f7f4″ custom_margin=”-641px|||||” custom_padding=”0px||0px|||” global_colors_info=”{}”][\/et_pb_section][et_pb_section fb_built=”1″ admin_label=”Section” _builder_version=”4.16″ custom_padding=”0px||0px|” global_colors_info=”{}”][et_pb_row column_structure=”2_3,1_3″ use_custom_gutter=”on” gutter_width=”1″ make_equal=”on” column_padding_mobile=”on” module_class=” et_pb_row_fullwidth” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” width_tablet=”100%” width_phone=”” width_last_edited=”on|desktop” max_width=”100%” max_width_tablet=”100%” max_width_phone=”” max_width_last_edited=”on|desktop” custom_padding=”0px||0px|” make_fullwidth=”on” custom_width_px=”680px” global_colors_info=”{}”][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/www.careersingovernment.com\/tools\/wp-content\/uploads\/2023\/08\/2.jpeg” title_text=”Motivated,Multinational,Team,Raise,High,Fives,On,Briefing,After,Finding” show_bottom_space=”off” force_fullwidth=”on” align_tablet=”center” align_phone=”” align_last_edited=”on|desktop” _builder_version=”4.21.0″ custom_margin=”-1px|||||” hover_enabled=”0″ animation=”off” global_colors_info=”{}” sticky_enabled=”0″][\/et_pb_image][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.16″ background_color=”#efefe9″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/www.careersingovernment.com\/tools\/wp-content\/uploads\/2023\/08\/3.jpeg” alt=”video presentation” title_text=”Group,Of,Interns,Or,Corporate,Staff,Young,And,Older,Professionals” show_bottom_space=”off” force_fullwidth=”on” align_tablet=”center” align_phone=”” align_last_edited=”on|desktop” _builder_version=”4.21.0″ hover_enabled=”0″ animation=”off” global_colors_info=”{}” sticky_enabled=”0″][\/et_pb_image][et_pb_text disabled_on=”off|off|” _builder_version=”4.21.0″ text_font=”PT Serif||||” text_text_color=”#818178″ text_font_size=”24″ text_line_height=”1.4em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” module_alignment=”center” custom_margin=”5.7%|10%||10%||” custom_margin_tablet=”|10%||10%” custom_margin_phone=”” custom_margin_last_edited=”on|desktop” hover_enabled=”0″ text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|phone” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n
For government, a frequently voiced contention attributes staffing problems to salaries that are too low.\u00a0<\/p>\n
[\/et_pb_text][et_pb_text _builder_version=”4.16″ text_font=”PT Sans|on|||” text_text_color=”#888888″ text_font_size=”12″ text_letter_spacing=”2px” text_line_height=”1.2em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” text_orientation=”center” module_alignment=”center” custom_margin=”20px||20%|” custom_margin_tablet=”20px|||” custom_margin_phone=”” custom_margin_last_edited=”on|tablet” global_colors_info=”{}”]HOWARD RISHER[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row use_custom_gutter=”on” gutter_width=”4″ column_padding_mobile=”on” custom_padding_last_edited=”on|tablet” admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” max_width=”1200px” custom_padding=”0px||0px|” custom_padding_tablet=”0px|||” custom_padding_phone=”” use_custom_width=”on” custom_width_px=”1200px” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.21.0″ text_font=”PT Serif||||” text_text_color=”#363636″ text_font_size=”20″ text_line_height=”1.4em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”19px||0px|||” custom_margin_tablet=”40px||0px|” custom_margin_phone=”” custom_margin_last_edited=”on|tablet” hover_enabled=”0″ text_font_size_tablet=”” text_font_size_phone=”” text_font_size_last_edited=”on|tablet” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n
Government\u2019s pay problems are further complicated by the role unions and employee associations play in the decision making. Their reticence to accede to change is understandable but it\u2019s a prominent barrier to needed changes.\u00a0 A great example at the federal level is the creation of the Cybersecurity & Infrastructure Security Agency (CISA) in 2002 but still does not have a pay system that makes sense for these emerging, high demand occupations.<\/p>\n
There are, however, jurisdictions and agencies where new pay policies and practices have been accepted.\u00a0 At the state level, Tennessee\u2019s successful civil service reform stands out.\u00a0 The state benefited from the leadership of Governor Bill Haslam and several appointees with years of experience in large corporations.\u00a0 The federal Government Accountability Office (GAO) adopted a simple banded salary system with increases based in part on performance.\u00a0 The Federal Aviation Administration (FAA) has a similar system based on broad salary bands.<\/p>\n
Realistically, there is no practical reason that precludes separate pay systems for different occupation groups.\u00a0 Police and fire departments have had separate pay systems for decades.\u00a0 Teachers of course have also had separate pay systems.\u00a0 Those systems are never questioned.\u00a0 Today, the rapidly changing market for tech skills warrants a separate pay system. Engineers and scientists also warrant a separate system. \u00a0Healthcare jobs are another obvious group where a separate system is the practical answer.\u00a0<\/p>\n
The old, tenure-based wage and salary programs are not the answer for the future.\u00a0 States can adopt changes like eliminating degree requirements or dropping minimum age or experience requirements to open doors to larger cohorts of job seekers but that does not promise to make the jobs more attractive.<\/p>\n
Important New Phrase \u2013 \u201cEmployee Value Proposition\u201d<\/h4>\n
Government\u2019s critics often oppose fully competitive salaries, focusing on payroll costs and \u2018total compensation\u2019.\u00a0 They are correct, when salaries are combined with the dollar outlay for what used to be called \u2018fringe benefits\u2019, the total is much higher than in the average company. \u00a0<\/p>\n
But that generalized comparison is virtually meaningless.\u00a0 The critics\u2019 argument assumes the hundreds of thousands of \u2018mom-and-pop\u2019 businesses are relevant to the comparisons. \u00a0Many provide only the required FICA benefits and paid leave.\u00a0 Comparisons are also distorted because private employers can deduct the costs and reduce their tax obligation, and thus reduce the net costs of the benefits.\u00a0<\/p>\n
More importantly, government\u2019s true competitors — larger private employers — are far more likely to provide comparable benefits.\u00a0 Additionally, larger businesses have bonuses, cash incentives and stock ownership plans that can add significant amounts, but those plans are ignored in the \u2018total comp\u2019 analyses.\u00a0 \u00a0<\/p>\n
Yes, government fringe benefits are generally better. However, the \u201cvalue\u201d of benefits to applicants depends on their age. \u00a0Not surprisingly, retirement plans are not the key to attracting applicants.\u00a0<\/p>\n
For young workers, pay is important but they also look for a healthy work-life balance, flexible hours, training opportunities, good managers, respect, and a positive workplace culture. \u00a0As workers mature, fair pay and job security are important along with work that involves what they do best.\u00a0 All of that is referred to now as the Employee Value Proposition (EVP) \u2013 that is the financial and non-financial benefits of a job.\u00a0 \u00a0<\/p>\n
According to Gallup, employers \u201cmust ultimately sell their employee value proposition (EVP) to potential job candidates.\u00a0 The art of talent attraction requires the creation of a total promise to potential hires . .\u201d\u00a0 That is something few public employers have tried but with highly competitive labor markets employers, public and private, need to convince job seekers they offer attractive career opportunities.<\/p>\n
Looking back, government retirement policies have contributed to the vacancy problem. \u00a0Air Traffic Controllers, for example, can retire at any time if they have 20 years of service and are at least age 50. Their mandatory retirement age is 56.\u00a0 Policies that encourage or require workers to retire in their fifties add to the vacancy problem. \u00a0The cost for public employers of funding retirement benefits paid over what could be 25 or more years is an added problem.<\/p>\n
Building Support for New Practices Requires Leadership<\/h4>\n
Today US labor markets as well as the world\u2019s are undergoing a rapid evolution in the way work and workers are managed. \u00a0The understanding of retirement is also evolving.\u00a0 The COVID crisis accelerated changes in management practices that started in the private sector two decades or more earlier.\u00a0 Now all employers have to rethink their practices to compete for scarce talent.<\/p>\n
One of those proven changes, relying on Employee Resource Groups (ERGs) to identify needed change, may be the quickest and easiest way to learn about problems affecting work groups. McKinsey argues, \u201cWhen managed well . . . ERGs will become powerful enablers of an organization\u2019s\u2014and its employees\u2019\u2014success.\u201d\u00a0 The level of trust that emerges from the meetings can be invaluable.\u00a0\u00a0 They know what\u2019s needed to improve government\u2019s EVP.<\/p>\n
The newest idea — eliminating degree requirements — shifts the focus to another emerging practice, skill-based hiring.\u00a0 The technical or \u201chard\u201d job skills can be confirmed through pre-employment testing, certification, and employment histories, but job candidates who possess good social or \u201csoft\u201d skills \u2014 the ability to work in groups, communicate effectively or to prioritize tasks \u2013 have the best chance for success. The key point is skill-based hiring is great in concept but requires an investment to understand the skills jobs require.<\/p>\n
Another proven idea, the use of salary bands, first surfaced more than two decades ago.\u00a0 It mirrors the pay framework used with college faculties (e.g., salary bands for Lecturer, Assistant Professor, etc.).\u00a0 The concept \u2018fits\u2019 jobs like those in engineering and technology where career ladders do not have clearly defined levels and the focus is on individual skills.\u00a0 At the federal level, both the GAO and FAA pay systems are based on salary bands. It\u2019s much easier to make the transition to a banded structure than one based on a multiple grade and step structure.<\/p>\n
Another option of course is pay for performance. Despite the history, it can gain acceptance in government.\u00a0 The pay increases in both the GAO and FAA programs consider individual performance.\u00a0 The Tennessee pay system also relies on performance pay.\u00a0 But it\u2019s important to understand that performance management is the key and if Tennessee\u2019s strategy is meaningful, two or more years of manager training and \u2018practice\u2019 are required.\u00a0 It\u2019s always true — better performers want their value to be recognized.\u00a0<\/p>\n
There are options to enable government to compete.\u00a0 Prominently, the common thread in the success stories is the role of leadership.\u00a0 It\u2019s doubtful that Tennessee could have realized the same level of success if Governor Haslam had not been elected.\u00a0 Also prominent is the pledge \u2013 the changes will be fair and contribute to improved government performance.\u00a0 When the goals are realistic and important to the public, employees will get on board.\u00a0 The recent story of the I-95 bridge collapse and surprisingly fast rebuilding in eastern Pennsylvania and Governor Shapiro\u2019s leadership make it clear great things can be accomplished.<\/p>\n
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His early focus was compensation and performance management. In those years he managed the consulting practices for Mercer in Manhattan and for Watson Wyatt in Washington and Philadelphia. He began working privately in the early 1990s. He also started working with Wharton\u2019s Peter Cappelli to plan and manage conferences for the Center for Human Resources. That put him in contact with the nation\u2019s HR thought leaders which triggered his interest in the practices that are redefining and expanding HR\u2019s role. His public sector clients have included a number of federal agencies, several states from Hawaii to Vermont, counties, cities and Pennsylvania court system. In 1990 he managed the project for OPM that led to the Federal Employee Pay Comparability Act and the switch to locality pay. He has also consulted with the UN\u2019s ICSC and the OECD in Paris. He has published frequently in HR journals and websites. He is the author or co-author of six books and a growing list of ebooks. The most recent is Building the Workforce Government Needs. He is associated with Grahall Consulting Partners. He has a BA in psychology and an MBA and PhD from Wharton.","sameAs":["https:\/\/www.govexec.com\/voices\/howard-risher\/2371\/","careersingov"],"url":"https:\/\/www.careersingovernment.com\/tools\/author\/howardr\/"}]}},"_links":{"self":[{"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/posts\/45298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/users\/3346"}],"replies":[{"embeddable":true,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/comments?post=45298"}],"version-history":[{"count":5,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/posts\/45298\/revisions"}],"predecessor-version":[{"id":45306,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/posts\/45298\/revisions\/45306"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/media\/45303"}],"wp:attachment":[{"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/media?parent=45298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/categories?post=45298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.careersingovernment.com\/tools\/wp-json\/wp\/v2\/tags?post=45298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}