Financial Pressures Constrain State and Local Government Hiring: Study Shows Layoffs Have Slowed but Pay Freezes and Benefit Cuts Continue

WASHINGTON, April 18, 2012 /PRNewswire-USNewswire/ -- A new survey by the Center for State and Local Government Excellence finds that more than half of state and local governments still have a pay freeze and are adjusting retirement and health care benefits.  At the same time, the pace of layoffs has slowed with 28 percent reporting layoffs this year compared with 40 percent last year. 

State and Local Government Workforce: 2012 Trends is a follow-up to three previous studies that have looked at questions related to the size of the workforce, compensation and benefits, and employees' plans for retirement.

The top workforce issue cited in 2012 is the public perception of government workers. Issues that continue to rank as most important are retaining staff for core services, addressing employee morale and workload problems, staff development, and reducing employee health care costs.

Workforce changes include:

• Employees accelerating their plans for retirement (22 percent)
• Workforce has shrunk since the 2008 economic downturn (68 percent)
• Pay freezes (51 percent)
• Hiring freezes (42 percent)
• Layoffs (28 percent)

In the area of health care:

• Shifted more health care costs to employees (51 percent, down from 72 percent last year)
• Shifted more health care costs to retirees (11 percent, down from 23 percent)
• Created wellness programs (26 percent, down from 33 percent)

In the area of pensions:

• Raised employee contributions to pension plans for current workers (24 percent, up from 22 percent last year)
• Increased employee contributions for new hires (27 percent, up from 23 percent last year)

The survey was conducted among members of the International Public Management Association for Human Resources (IPMA-HR) and the National Association of State Personnel Executives (NASPE) from February 27 to March 13, 2012. Three hundred and forty-three (343) members took part in the survey. Of the members who responded to the electronic questionnaire, 82.2 percent work for local government; 12.3 percent for state government; 1.5 percent for federal government; and 4.1 percent for a non-government sector. Some questions elicited more responses than others.

"With some governments in their fourth year of pay and hiring freezes, there are real challenges to retain, develop, or find the skilled staff needed for essential services.  The list of positions that are hard to fill has been growing, an indication that the competition for talent is heating up as the economy slowly recovers," noted Center President and CEO Elizabeth Kellar.

Respondents report that they continue to have a hard time filling a number of positions, including engineers; environmental, chemical, and forensic credentialed professionals; finance; police and firefighters; information technology professionals; librarians; nurses and physicians; middle and top management; skilled trades; and social workers.

"State and local governments face significant challenges as they continue to be affected by the economy," said Neil E. Reichenberg, executive director of IPMA-HR. "The workforce constraints combined with the negative public perception of government presents serious employee engagement and morale issues. Additionally, as the economy improves, state and local governments will need to focus on the retention of current employees, as well as developing strategies to ensure that they are viewed as an employer of choice." 

"Employee morale and engagement continues to be the top challenge facing the country's state HR directors," said Leslie Scott, director of NASPE. "The effects of budget cuts, such as layoffs, furloughs, and pay freezes, coupled with a less than optimal public perception of state employees has taken its toll on the state government workforce."

See the full survey at http://slge.org/publications/state-and-local-government-workforce2012-trends

You can find all the Center's research on workforce issues at http://slge.org/research/workforce.

About the Center for State and Local Government Excellence
The Center for State and Local Government Excellence helps state and local governments become knowledgeable and competitive employers so they can attract and retain a talented and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. The Center also brings state and local leaders together with respected researchers and features the latest demographic data on the aging workforce, research studies, and news on health care, recruitment, and succession planning on its website, www.slge.org.

SOURCE Center for State and Local Government Excellence