Workforce Challenges for State and Local Employers

Among the state and local government workers included in MissionSquare Research Institute’s State and Local Workforce Survey 2022, 53% are accelerating their retirement plans and 17% are postponing their retirement dates, the highest such numbers in over a decade.

In 2009, the first year of the survey, 44% of municipal workers hastened their retirements and 12% delayed, according to data presented in “Achieving Workforce Diversity, Equity, and Inclusion in Local Government,” an International City/County Management Association webinar covering MissionSquare’s research.

From the pre-pandemic peak in staffing levels in February 2020, total state workforces are down 1.9% and local workforces have decreased 4.1%, the MissionSquare survey found.

Contributing factors include the available labor supply, fiscal uncertainty for coming years, compensation structures and the underlying demographics of the public-sector workforce, explained Joshua Franzel, managing director at MissionSquare Research Institute, during the webinar.

“There’s been an uneven recovery at the and local state level, by industry as well,” Franzel said, presenting the research that he coauthored. “For example, state education is more or less recovered, state hospitals have more or less recovered, but state general administration is well below pre-pandemic levels. On the local side, pretty much all major industry levels remain below peak February 2020 levels: education, utilities, transportation, hospitals [and] general administration all remained below where they were.”

The survey found that retirements were higher than in 2020 for 60% of respondents, while they were the same for 32% and lower for 8%. Among employers, layoffs—excluding terminations— were higher than in 2020 for 6% of respondents, and were the same for 52% and lower for 41%. The research also found that 59% of state and local government employers do not feel their employees are financially prepared for retirement. 

Employee separations are elevated across state and local government employees, as 69% of respondents said that quits—voluntary non-retirement separations—are higher than in 2020, while 26% said it is the same and 5% reported a lower figure.  

Among state and local governments, 81% have hired new employees, according to 2022 data. The next most prevalent change reported was broad-based pay increases, at 38%, followed by 37% of employers that hired temporary or contract workers and 31% that updated job specifications for minimum education and skills. Tied at 25% were changes to permanent or long-term telework options, travel or training restrictions and rehired staff that had retired, the survey found. 

The  is a national nonprofit organization representing state and local governments. It administers and manages 457, 403 and 401 retirement plans for the benefit of public-sector employers and employees. Data from the MissionSquare Research Institute survey was gathered in collaboration with the International Public Management Association for Human Resources and the National Association of State Personnel Executives. The survey was conducted this year from March 3 to April 24. There were 319 state and local government human resources staff respondents.