As an employer, the federal government is facing perhaps the most trying times in its history. Individual worker dissatisfaction and productivity are falling, turnover is rising and hiring is at a standstill. Below is a dive into the three overarching challenges for federal employers in the 2020s.
Challenge #1: The aging workforce
The challenges presented by the current demographic shift in the US are hardly unique to the public sector. However, certain other working conditions only exacerbate the issues of the present-day workforce. Various government agencies have been warning of the imminent major shift in US labor due to the aging workforce for two decades, and the country as a whole has reached the tipping point.
In 2005, the Bureau of Labor Statistics (BLS) calculated that 16.8% of the entire civilian workforce of 151.4 million were aged 55 or older.1 Five years later, that number had risen to 20.86%, a record level in the post-World War II era that has been broken every successive year through to the 2020 census; at that time, the number was set at a whopping 23.72%, representing a 41.2% increase among this age group’s numbers as compared to a mere 5.0% increase in the overall workforce.2
Finally, statistics calculated by AARP showed that amidst the pandemic in 2020, those aged 50 or older comprised 37.3% of all “essential” workers in the United States and 14.9% were 60 or older.3
One positive side to the aging (and so retiring) workforce is the newfound potential for public-sector enterprises to streamline operations as well as offer new employment opportunities for those entering the job market.
However, a pair of other realities more than subsume any positives caused by the aging workforce. First is the labor shortage: According to a BLS study released in November 2018, at least 13 industries in the US are experienced significant overall labor shortages at that time. The government sector ranked fifth in terms of worker shortfall, behind education and health services; professional and business services; financial services; and mining and logging.4
As of year’s end 2020, about 2.929 million were employed by the federal government, representing 1.93% or the total workforce. State and local governments accounted for another 18.98 million (12.54%).
Secondly, as the workforce succumbs to increasing numbers of retiring workers, an untold amount of experience and knowledge – not to mention the resources expended in employee training and education – is lost. Combined with some seemingly inherent problems in public-sector work, the aging workforce issue is now at crisis level for the federal government’s employers.
Challenge #2: The salary gap
Money does matter, and the federal government in particular seemingly doesn’t pay competitive salaries in some critical areas of science and technology. According to BLS statistics from January 2022, the median wage of federal government employees in 2021 was $68,588/year. This made for reasonably competitive wages against the average private-sector employee, but fell well short of those offered in industries such as:
- management, with median salaries of $72,280-$80,392/year;
- professional technical services, $75.750/year;
- architecture/engineering, $85,333/year; and
- computer sciences/mathematics, $86,320/year.5
Also of note is that each of the aforementioned industries saw an increase in median employee salary year-on-year to 2021, while that of the federal government worker was decreased slightly.
The disparity between private- and public-sector wages in management is particularly troubling when coupled with the statistics on the aging workforce in the US, as retirements are increasing at a disproportionate rate among federal government management jobs. In 2018, a piece at Government Executive found that some 15.1% of government employees were of retirement age already, with the number trending to 33% in 2023; some two-thirds of these – representing about 20% of all such positions in the federal government – are top-line managers.6
In addition to working with a lower pay grade, the particularly ambitious federal employee will inevitably feel constricted by governmental pay ceilings. In 2020, the US Congress raised the salary of a GS-15 to $170,800; the median salary for federal employees that year was $68,250. That may seem like enough space in which to grow one’s salary, but certainly not compared to private-sector industries for whom the sky is the financial limit.
Challenge #3: Incredibly high turnover
When the Government Accountability Office (GAO) submitted the required report to the Senate Committee on Oversight and Reform on the state of disability employment in the federal government, another incredible fact was brought to light: In the report, GAO statistics showed that some 60% of disabled federal government employees during the timespan of 2011 to 2017 left their jobs within three years – but the real stunner is that the number is almost exactly the same for all federal government employees.7
Considering that estimates from HR firms has placed the amount of employee training on the average private-sector job is nine months, a three-year turnover rate is quite cost-prohibitive.8
The annual Federal Employee Viewpoint Survey taken in 2021 gives a few hints as to particularly problems which can lead to higher turnover. In the agree/disagree section of the survey, at least three questions were met with 50% or fewer responses marked on the “agree” side of the scale:
- In my work unit, steps are taken to deal with a poor performer who cannot or will not improve.
- In my organization, senior leaders generate high levels of motivation and commitment in the workforce.
- In my work unit, differences in performance are recognized in a meaningful way.
The job satisfaction index numbers are also discouraging as well. Overall satisfaction was down 5 points year-on-year from 2020, and the four sub-metrics comprised this score – job satisfaction, pay satisfaction, organization satisfaction and “would you recommend” – each saw a decline of 4 to 6 points.
While the study authors advise caution and factoring in for Covid-caused conditions since 2020, each of the aforementioned satisfaction metrics had actually increased for 2020 by 3 to 5 points each. The authors also admit that the 1% across-the-board pay increase of 2021 is likely a factor in the drop in pay satisfaction from 67 to 61 y.o.y.9
Conclusion: The future is all about adaptability
Change is not coming to federal government hiring: It’s already here. Innumerable small adaptations of technology, HR practices, management training and online infrastructure will be needed to evolve the entire federal employment paradigm. Those public-sector enterprises and workplaces which can streamline and become more flexible are certain to not only survive, but thrive, in the coming years of the workforce shift.
- “Accommodate Aging Workforce Population,”Center for Disease Control and Prevention (CDC), 2005.
- “Who Makes Up the Workforce, by Year and Age? 1962-2015: A Calculator,” DQYDJ.com.
- “The U.S. Essential Workforce Ages 50 and Older: A Snapshot,” AARP Public Policy Institute, October 2020.
- “These are the industries with the biggest labor shortages,” CBSnews.com, February 2019.
- BLS table: Median weekly earnings of full-time wage and salary workers by union affiliation, occupation, and industry, January 2022.
- “The Federal Agencies Where the Most Employees Are Eligible to Retire,” GovExec.com, June 2018.
- Government Accountability Office (GAO): GAO-12-568, a report to the Chairman, Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Committee on Homeland Security and Governmental Affairs, U.S. Senate; May 2012.
- “Retaining Talent: A Guide to Analyzing and Managing Employee Turnover,” SHRM.org, 2008.
- Federal Employee Viewpoint Survey, 2021. US Office of Personnel Management.