Nowadays, we often hear about businesses needing more workers or struggling to build stable talent pools. The worker shortage epidemic has become the new normal, as the issue is constantly echoed in the media and permeates many everyday conversations. The public sector has not been immune to these challenges. In fact, communities everywhere are feeling the impact of public shortages.
Several critical state departments have suffered from employee shortages, leading to severe consequences. According to an Economic Policy Institute study, approximately 192,400 bus drivers worked in K–12 schools in September 2023, down 15.1% from September 2019. In Alaska, a shortage of state troopers has led to one town urging residents to arm themselves due to a lack of police presence. In response to severe shortages of corrections officers, Texas is now allowing teenagers to begin corrections training while still in high school. Once they obtain their license and reach the age of 18, they can start working in lock-ups. According to data from the Texas Commission on Law Enforcement, in 2023, “68 18-year-olds obtained their jailer’s license, 17 times the number who obtained their license a decade earlier.”
Unfortunately, this is a significant problem without a clear solution. While the typical and most direct answer is to increase salary compensation to attract workers, that strategy can be insufficient for retaining employees for the long term, and public systems are notoriously underfunded. Luckily, there is a tactic that has been proven time and time again to be highly effective: Providing a defined benefit pension plan to current and potential workers.
Last week, Dan Doonan, Executive Director of the National Institute on Retirement Security (NIRS), wrote in Forbes about the positive effects defined benefit pension plans have on recruitment for public jobs. In his article, Doonan acknowledges that the majority of public employees have a combination of a defined contribution and a defined benefit plan and that the existence of a pension plan for these employees helps increase the likelihood of longer employee tenure.
The Bureau of Labor Statistics (BLS) finds that the average tenure for a public employee is seven years compared with four years for a private-sector worker. This corresponds with another survey cited in the article by the Employee Benefits Research Institute (EBRI) that shows a public employee has a tenure of seven years as opposed to four years for a private sector employee.
Below are two charts explaining how pensions effectively retain public employees. Turnover is highest for most careers in the first few years of employment.
Turnover in the public sector and vital service jobs, such as those of firefighters, healthcare workers, and educators, can happen for a litany of reasons. High stress, challenging working conditions, and safety risks are common in these roles. Additionally, during the early years on the job, workers often reassess whether the career aligns with their personal goals and long-term aspirations.
Pensions have proven to be highly effective at retaining employees, especially when workers have reached the middle of their careers. After several years of earning a pension, employees gain a stronger investment in their future, seeing what their dedication and commitment to a career have earned them. This is especially critical in roles like teaching, where it takes years to develop expertise. High turnover disrupts this progression and results in significant losses for public employers who have invested heavily in training and development.
There is a lot to be said about how young employees value flexibility in today’s job market. Opponents of pensions often speak for young workers by saying they don’t want to commit to long careers– and, therefore are not interested in pensions. However, it is easy to say someone doesn’t want something when the option is unavailable, or when they are not aware of the options they have. But the data and common sense reach the same conclusion: When a defined benefit pension plan is offered, there is more investment in the job. And when employees have security, they will stay committed to their careers.