Just two years ago, at the onset of the pandemic, cities from Los Angeles to New York City suffered massive furloughs and were desperate to cut payroll expenses at any cost. Blind to the severity of the impending revenue loss lurking around the corner, agencies even considered offering cash payouts to incentivize early retirement. Fast forward to the present day, and the public sector is now struggling to meet the demands of their communities with too many job vacancies and too few interested candidates.
The Great Resignation
With the pandemic also came the Great Resignation. Employees quit or retired for a multitude of reasons from health concerns to burnout. No county, city or industry went untouched by this mass exodus, but the aftereffects have negatively impacted the public sector, more so than the private sector, in terms of viewing it as a long-term career path. Cities are ready and eager to hire now that tax and fee revenues are up, and ARPA funds have been issued to provide additional assistance. The problem is local government benefits aren’t as appealing as they once were.
A pretty pension plan isn’t as important to Generation Z workers who value different perks than those traditionally offered by the public sector. The pandemic changed the way the workforce operates and left younger workers with higher expectations. Flexibility, remote work, less travel, less responsibility and more pay trump employer-funded retirement plans, especially as younger generations were raised knowing the future of social security is uncertain. Large cities such as San Francisco, Los Angeles and Houston have planned for gradual increases to try and attract employment, but pay rates are regulated and require legislative changes. Cities simply cannot compete with the private sector without it being a budget issue.
The Silver Tsunami
For the past 10 years, Baby Boomers have reached full retirement age. The majority of local government positions are occupied by this generation, so the Silver Tsunami adds to staffing shortage concerns. In eight more years, all remaining Baby Boomers will reach the eligibility age and the second largest generation will leave the workforce, taking with them decades of experience and knowledge that can’t be replaced.
One possible favorable effect of the pandemic is that retirees are now reconsidering retirement. Lockdown and isolation made many 65+ year olds realize their skills and expertise are being wasted. While retirees have become a targeted population because they’re not looking for the same perks as the younger generation, a legislation change would be needed to allow retirees to work again and eliminate double-dipping.
Limited Staff, Limited Services
Legislation changes to increase pay or reverse retirement are considerable options, but they require time that agencies don’t have right now. Cities need to hire immediately just to keep operating and serving their communities. The laundry list of to-dos is ever-growing; some agencies can’t even allocate ARPA funds because they don’t have the staffing resources to navigate all the red tape!
Staffing shortages aren’t contained to City Hall either; all public sector positions and/or programs – teachers, social workers, bus drivers, DMV workers, water treatment plants, afterschool daycare, etc. – are experiencing limited staffing. Little to no staff means delayed or cancelled city services. For example, no lifeguard for the city pool equals no summer swimming. No summer swimming equals pent-up, hyper children and frustrated parents. Frustrated parents equal more complaints to the City Manager’s office that will most likely go unanswered because he/she is already drowning (pun intended!) in staffing-related issues. See how quickly it escalates?
How can local government maintain operations, supplement a loss of experience and knowledge, and keep a balanced budget? Nearly 10 years ago, HdL forecasted this change and introduced administrative services for business licensing. Today, our Tax and Fee Administration (TFA) services have grown to include business licensing and occupational tax, business discovery and compliance, lodging tax and short-term rentals, utility users tax, cannabis tax, rental registration, parking tax, animal licensing, cyclical miscellaneous billing, and so much more.
“It’s rare finding a solution to provide a trifecta of services to a local agency. HdL’s TFA solutions offer reduced cost to manage locally administered programs, while increasing both customer support and revenue at the same time,” explains Josh Davis, HdL’s Director of Professional Services.
Municipalities with limited resources can rest easy knowing that HdL’s TFA services provide turnkey solutions perfect for any agency’s needs. Outsourcing administration will alleviate staffing challenges, but we understand there is still a long road ahead to recover. For almost 40 years, 600+ local government agencies have entrusted HdL with every aspect of their revenue management. We are empathetic to the demands you face and enjoy serving you so you can continue to serve our communities.
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