Human Resource Planning for the Unplanned - How North Carolina Has Prepared for the Next Generation of Government

Human Resource Planning for the Unplanned – How North Carolina Has Prepared for the Next Generation of Government

Best of Series – Part 1

  • Baby Boomers are reaching the age of retirement at record rates and by 2025 Millennials will make up three-quarters of the American workforce.
  • Because employees within Government positions are older on average, the public sector needs to have workforce planning in place to transfer vital knowledge before it is lost.
  • Millennials are looking for opportunities where they can make a difference, are motivated by empowerment and consistent feedback, and value a work-life balance.
  • Georgia has shown a 27% increase (year over year) in public sector retirements – significantly higher than other states in recent years.
  • In order to compete with the private sector, State and local agencies will need to look for effective ways to not only recruit, but develop and retain a new generation of young talent.
  • The State of North Carolina offers several best practices in many of these areas through enhanced postings on GovernmentJobs.com, their Young Employees Initiative (YEI) and the North Carolina Valuing Individual Performance (NCVIP) programs.

Executive Summary

As Baby Boomers exit the workforce, Millennials now account for 1 in 4 U.S. workers. This poses a particular problem for the public sector who will be facing a greater transition of its workforce with fewer tools to fix it. Knowing your customer and making a plan is only the first part of hedging this coming risk. What follows are a series of tips (injecting excitement into job postings, modernizing and streamlining the hiring process, integration of new hires, retention planning, employee engagement, leadership development and integrated/constant talent management) for finding, creating and retaining excellent talent within a jurisdiction.

The Problem

As of January 1, 2011, more than 10,000 Baby Boomers (those born between 1946 and 1964) will reach the age of 65 every single day, and will continue for the next 14 years.1 To put this into perspective, consider that in 1960, the U.S. had 5.1 workers to each retiree. Today, it is closer to 3 to 1. By 2030, it will be 2.2 to 1 retiree. The mass exodus of Baby Boomers from all sectors of the workforce has been a crisis in the making for years, but it’s the public sector where some of the oldest workers can be found.2 The average Federal employee is 47 years old, compared to age 42 for all American workers. Federal workers can retire at the age of 62 or younger (with 20 years of service).3 That generation is a large one, and the pattern of retirements that appear to be taking place creates a rare opportunity for the US government to increase the caliber of its employees (See Exhibit 1). Yet, many in the public sector are still remarkably ill-prepared for the impending turnover rates that could potentially cripple the workforce.

Best of Series Human Resource Planning for the Unplanned-part1-chart

By the year 2025, Millennials will make up 75% of the American workforce.4 This statistic alone should be enough to urge local governments to plan for attracting younger employees and training them for leadership positions.

All industries deal with this, but the state-level public sector must plan for this change more because:

  1. They will have to compete directly with the private sector on exactly the same workforce challenge;
  2. Public sector employees are having to do more with less, meaning that the skill set and performance expectations for the jobs will be enhanced; and
  3. Total compensation (salary + benefits) for state government employees is rarely as competitive with the rest of the marketplace.5

The Solution: Part 1 “Meet the Millennials”

Millennials are now the dominant generation in the workplace, surpassing Gen Xers (ages 36 to 51) and Baby Boomers (ages 52 to 70), according to a Pew Research Center study last year. Millennials now account for more than one in three American workers. In less than 10 years, they will make up three-quarters of the American workforce, so the search for ways to reach the group has become hugely important, and traditional approaches to public sector recruitment no longer apply. 6

Many of the younger workers have a “live first, work second” mindset. Research has consistently shown that next generation workers are attracted to employers who support the desire for balance between their personal and professional lives, and are more willing to move or take a cut in pay in order to have more flexibility. They also expect employers to embrace technologies that offers workplace efficiencies.

Many of the imposed processes that slow down local government decision making may frustrate the younger generations of workers. Instead, they are motivated by management practices that “empower, enable and encourage innovation, follow-through, and results.” They want to be viewed as partners in the organization who are included in decision making from the start, and are energized by opportunities to engage, interact, and learn from senior managers as well as positions that “make a difference” in the community.

In contrast to traditional annual performance evaluations, Millennials seek frequent, real-time feedback that enables them to improve performance and be recognized for their contributions. Opportunities for career progression make an organization attractive to young workers, while the lack of opportunity for advancement is one of Millennials’ top five reasons for leaving an employer.

The Solution: Part 2 “A Workforce Plan “

Governing compiled retirement figures from a sample of 10 larger state pension systems with available data. Retirements for six systems were on pace to exceed last year’s total, but only the Employees’ Retirement System of Georgia had registered more than a 10% year-over-year increase from 2012. (See table below).

Best of Series Human Resource Planning for the Unplanned-part1-chart1

The accelerated rate of annual retirements has tremendous implications for Georgia’s state and local governments’ ongoing ability to maintain a committed, skilled workforce and strong support of its communities.

States and cities that make careful predictions of their future employment needs through effective workforce planning have the opportunity to get ahead. Knowing or predicting where your biggest gaps are going to be within your organization is a great first step. But actually filling those positions is a different matter. Recruitment, development and retention are the greatest challenges facing government Human Resource Managers.7

To compete successfully with private sector employers, government agencies must change their approach to sourcing new talent. Slow, inefficient, and standardized practices simply won’t work and will therefore need to be more creative and innovative in recruitment efforts.

Government agencies will need to tailor not only their recruiting messages but also the channels they use to communicate with younger candidates they want to attract, moving away from the traditional one-size-fits-all recruiting approach.

Cornerstone conducted a survey among government executives within both Federal and Defense agencies, released in the 2016 Human Capital Management Report. According to the survey, 44% of agencies said they had no strategy in place geared toward Millennial recruitment. But those who do are finding success in a variety of channels not traditionally utilized by the public sector (See Exhibit 2).

Best of Series Human Resource Planning for the Unplanned-part1-graph-Exhibit2

Most (76%) are actively engaging in Millennial outreach through social media. Six out of ten agencies use internships to bring interested Millennials into the workforce, as well as more targeted marketing techniques, including on-campus outreach. In fact, one company found that public-sector employees in their twenties who gave on-campus talks about their work and professional impact, was effective in drawing 50%-100% more job applications than the standard career-fair booth, because it allowed applicants of similar backgrounds to visualize themselves in the job.8

Government agencies understand that they probably cannot compete with the private sector in terms of salaries, but there are motivating factors unique to the public sector that make an organization very attractive to talented people—a sense of purpose, a mission that matters, being able to serve the public with integrity, internal mobility, and job variety—factors next generation workers are seeking in careers. Government employees often work at the cutting edge of a broad range of issues, while making an impact, that few employers in the private sector can offer.

The Solution: Part 3 “Tips for Success”

As indicated above, the first step is to have a plan. Understanding the customer can be difficult in a public sector setting, but it is critical that the plan reflects the demographic realities of the market.

Job postings should convey a sense of excitement for service, while emphasizing workplace flexibility and work-life balance; greater in government service than in most of the private sectors. According to 2016 HCMG Report, teleworking and flexible hours are offered by 88% of agencies. Dull or bureaucratic job postings will get less and less traction as demographics move to their inevitable conclusion.

Modernize and streamline the hiring process. Hiring systems in many states are still fundamentally paper-based, which can be improved dramatically with technology. Approvals and processes should be honed to understand the needs of the customer/applicant and their inability to wait 6-12 months for the hire.

Once employees are brought into the workforce, integrate Millennials into new environments and develop their skills in order to build organizational effectiveness. The brain drain resulting from retirements can be devastating. But according to 2016 HCMG Report, 53% of government agencies report not having any development program in place geared toward Millennials.

BestOf-grey box with white spadeBEST OF: NC’s job postings and recruiting efforts
More state and local governments are posting openings on GovernmentJobs.com, a national recruiting website with an integrated applicant tracking system, in order to further reach candidates. Before the North Carolina Department of Transportation began advertising positions on the site, the agency received about 125 local applicants for an entry-level training program. Now, it’s getting about 400, nationwide. 9

Recruitment through its Public Health Associate Program (PHAP), N.C. CDC office amped up communication so their high potential candidates remain engaged throughout the long recruitment and onboarding process. Even before being selected and hired, their program lets candidates know they care about their careers after graduation.

In addition, online job applications have been implemented by all North Carolina agencies, statewide.

Knowledge transfer, an important part of succession planning, ensures that the loss of experience and institutional knowledge accompanying the retirement of Baby Boomers is minimal. The good news is that many senior leaders are delaying retirements (for various reasons) and want to give back, creating a legacy in their organization. Savvy jurisdictions seize the opportunity and engage their most senior leaders before they retire, harvest collective experience and shape the next generation of leaders. A formal plan should be in place to transfer critical knowledge to avoid losing decades of experience to retirement.

BestOf-grey box with white spadeBEST OF: NC’s Knowledge Transfer Through Knowledge Management (KT&M) Program
By 2020, more than 30% of North Carolina’s current state employees will be eligible for retirement. The Knowledge Transfer (KT) program helps managers identify the mission-critical positions, programs, tasks and activities at risk of being lost, and then designs a plan to capture and transfer the knowledge associated with those positions to others in the organization. The KT &M program creates learning opportunities to develop staff, leverages best practices and preserves critical institutional knowledge, able to be implemented at all levels within an organization. Management can post Knowledge Transfer Learning Opportunities whenever critical knowledge is at risk, or a best practice can be leveraged throughout the organization. No start-up costs for the program were required. The success and effectiveness of the program is measured by a set of performance metrics, including Participation, Satisfaction, Performance, and Development measures.10

Next, focus on retention AND engagement. Routine turnover is part of the new reality; research indicates that many young employees value mobility over long-term careers. A national survey conducted by the research firm Millennial Branding found that 45% of companies experienced a turnover rate among their younger ranks double that of older employees. But turnover rates within Georgia’s public sector have risen from 15.6% in 2011 to 18.4% in 2015,11 nearly twice the national average for government employment turnover (7-8%).12

While budget cuts, furloughs, and retirements threaten to reduce workforces to ineffective levels, it’s reduced engagement and low morale among government employees that present the most imminent threat to agencies’ capacity and longevity of workforce.13

Local governments offer employees the opportunity to contribute to positive change in the communities in which they live. Research has shown that the more engaged and involved young workers are in their community, the longer they are likely to stay. According to Harvard Business Review, 86% of Millennials and 85% of Boomers believe it is important that their work involve “giving back”. Creating a culture of giving back is a great way to retain employees who are looking for meaning in their work. And according to a PricewaterhouseCoopers study, employees most committed to their organizations put in 57% more effort on the job and are 87% less likely to quit than employees who consider themselves disengaged.14

BestOf-grey box with white spadeBEST OF: NC’s Young Employees Initiative
The turnover rate for North Carolina state government workers ages 18-30 is approximately double that of older employees. Recognizing a need to retain these workers and transfer to them vital knowledge from their peers, the state responded by launching its Young Employees Initiative (YEI) in 2008, not only to better understand the needs of Millennials, but to actually address them. With the declining number of young individuals available for work, coupled with the increasing number of employees eligible to retire in NC State Government, the YEI helps to counteract the potential “knowledge drain”. Employees mostly in their 20s from various state agencies serve on an advisory committee, conducting studies and making recommendations on issues important to their peers.

Committee members participate in various activities which include networking sessions and community service projects. The YEI has increased awareness of the value of employing young people and the importance of community service and work-life balance. With increased levels of engagement and overall morale, the turnover rate for young employees declined from 20.7% in 2007 to 14.6% for 2011.15

A visible leadership development program communicates opportunities for internal mobility and growth if employees respond by investing in the organization. But even with excellent training and advancement initiatives, government needs to have consistent employment development to keep its workforce engaged. Creating a framework of feedback is critical to ensure that positive efforts are noticed, and provide a venue to identify and motivate leadership candidates.

According to 2016 HCMG Report, 47% of agencies consider their efforts of providing continuous feedback to employees as “unsuccessful”. This is a particular problem for Millennials, who prefer continuous feedback and consistent opportunities to grow and learn.

Integrated Talent Management systems help businesses more effectively and efficiently deliver meaningful feedback, drive ongoing learning and development, and promote career paths that align with both employee and organizational goals. According to Bersin & Associates, companies with fully integrated talent management strategies, processes and systems have half the rate of turnover, twice the rate of promotions and are 92% better at creating a pipeline of successors.16

BestOf-grey box with white spadeBEST OF: NC’s Valuing Individual Performance
The North Carolina Office of State Human Resources (OSHR) wanted to increase consistency and efficiencies across state government with a new HR Service Delivery Model that would improve transactional processes using technology, communications and training for HR professionals statewide. In 2015, OSHR implemented a new statewide Performance Management Program, branded as NCVIP (North Carolina Valuing Individual Performance), which evaluates employees’ knowledge and capabilities, as well as measures attainment of goals. The objectives are to facilitate regular communication between employees and managers, increase understanding for employees of their contribution to the organization, provides regular feedback, create discussions about professional development and establish accountable, rating standards.17

As a means to acknowledge their contributions and retain employee commitment, North Carolina State Government adopted a State Employee Recognition Program, recognizing employees for committed, dedicated and outstanding service. To express appreciation for its valued employees, the state currently offers six different award programs.

Summary

Risk abounds for some of the greatest resources that state and local governments have: their human resources. Yet those institutions that identify the issues and proactively plan around them will have opportunities to mitigate the risk.

By implementing some of the ideas outlined, and taking note of best practices among other state agencies, like North Carolina, not only would government be able to address the short term challenges but it would also fundamentally reshape the government talent pool for the long term.

The North Carolina Office of State Human Resources (OSHR) efforts are centered on attracting, retaining, developing, and motivating a high-performing and diverse workforce. They have taken steps to prepare for this rising tide and have implemented some unique tools and ideas to help plan. In 2015, they were awarded SHRM’s Platinum EXCEL Award, recognizing the State’s development as a business leader in human resource management, by implementing strategies that lead to business success. Some of these initiatives are featured in this article as a guide toward best practices.

The governments that will win the talent race are those that adapt to changing times, anticipate their workforce needs, share great stories about the opportunities of working for their organizations, and invest in and engage their multi-generational employees. Local government managers need to make the case for change and champion it.

Link to whitepaper