Boomers Are Retiring: Now What?

Transcription

1 Boomers Are Retiring: Now What? Elizabeth K. Kellar President/CEO Center for State and Local Government Excellence Southern Legislative Conference July 18, 2015

2 The future is coming quickly Demographics tell the story The state government workforce has decreased by 2% from Average age of state workers was 45 in 2014 See: The State and Local Workforce: Analysis and Forecast Government Finance Review :

3 An aging workforce Average age in 1994 was 41 Average age in 2014 was 45 Source: SLGE analysis of Current Population Survey (IPUMS-CPS, Minnesota Population Center, Univ. of Minnesota)

4 The quiet talent crisis Turnover slowed after the Great Recession More movement now Many retirement-eligible employees have rebuilt their retirement savings Better economy Succession planning is rare Boomers replace boomers Then what?

5 Older, more educated workforce Median age: 39 for private sector 45 for state and local employees 30% of the private sector workforce are knowledge workers 70% of state and local government workers are knowledge workers Source: Center for State and Local Government Excellence and Stuart Greenfield

6 An increasingly educated workforce {% of State and Local Government Employees} Source: SLGE analysis of Current Population Survey (IPUMS-CPS, Minnesota Population Center, Univ. of Minnesota)

7 2015 State and Local Government Workforce Trends An improving landscape, but fiscal constraints: 73% - hired employees 43% - shifted health care costs to employees 42% - hired contract or temporary employees 29% made changes to retirement benefits 11% - hiring freezes 7% - pay freezes 6% - layoffs Source: State and Local Government Workforce: 2015 Trends, SLGE, June 2015

8 Adapting to fiscal realities and service demands Situation slowly improving NASBO reports that 2015 state revenues are better than forecast. 36% gave pay increases in 2014; 73% hired employees last year. Still, there are 600,000 fewer state and local workers compared with 2008 Sources: NASBO Spring 2015 Fiscal Survey of the States and SLGE/IPMA-HR/NASPE State and Local Government Workforce: 2015 Trends and U.S. Bureau of Labor Statistics

9 State and local government employment Chart: SLGE / Data : BLS Current Employment Statistics survey (2014)

10 2015 HR observations Between now and 2020, we are looking at 40% of the workforce able to retire. How to fund staff raises -- some staff have not had merit raises in 7 years. Employees want more compensation and forgot what happened in 2008 when we said it was a new reset.

11 Traditional selling points for recruiting 1. Wages 2. Benefits 3. Flexible practices 4. Opportunity to serve the public 5. Gain unique experience

12 Hiring challenges It takes a lot of time to fill senior positions sometimes we have to go through the recruitment process three times.

13 Competing for talent Highly educated specialists are in greatest demand and the list is growing Changing economy requires different skills Attracting and retaining talent requires changes in recruitment practices, incentives for older workers, and staff development Does our compensation package work for the diverse needs of our workforce?

14 Benefit packages matter Two out of ten employees left their job or accepted a new job due to the benefits package Dallas Salisbury, Retirement Security Summit, June 2015, quoting 2015 EBRI retirement confidence survey

15 The portion salary and benefits make up of overall employer costs for employee compensation (BLS) Chart: SLGE / Data : BLS Employer Costs for Employee Compensation (2015)

16 Public business, my son, must always be done by somebody. It will be done by somebody or other. If wise men decline it, others will not; if honest men refuse it, others will not. John Adams, writing to his son.

17 Who Is in the pipeline? How do we find the right people? What compensation package will be competitive? What skills and experience will they need to advance?

18 Managing the gap How many of your staff are eligible to retire in each of the next five years? Are there any key roles and responsibilities to transition? What are your talent gaps, needs, and development plans? Do you have a sound benefits policy?

19 How flexible is your workplace? Part time work? Fiscally responsible return to work policies for retirees? Able to adjust benefits for talent needs? Multiple ways to save for retirement? Recruitment and hiring policies? Space? Telework? Schedules?

20 What do people want? An intergenerational workforce that appeals to all ages & stages Cross-cutting assignments Outlets for environmental interests and leadership Speedier recruitment processes (on-line advertising; appealing job ads; internships that lead to jobs)

21 For more information, visit: slge.org Conducts research on state and local government competitive employment practices, including: pensions and retirement, health benefits, demographics, and workforce issues. Visit publicplansdata.org for current pension data & facts Elizabeth Kellar, Center for State and Local Government Excellence,