A Difficult Reality for Those Who Want to Run Government 'More Like a Business’

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Compared to the private sector, public-sector organizations will always be at a disadvantage when it comes to this management pain point.

This article is part of an ongoing series looking at findings from Route Fifty’s recently released 2018 Management Survey.

It’s a common refrain heard among some voters and candidates pursuing elected office: “Why can’t government be run more like a business?”

That’s a complicated question, naturally, and answers can’t be easily boiled down into a TV-friendly sound bite or campaign slogan—though plenty have tried. Here’s one area where small-government ideology barrels head-long into a real-world reality: The difference in what the public and private sectors can pay to attract top talent.

In Toledo, Ohio, The Blade recently reported that Mayor Wade Kapszukiewicz has told civic leaders that salary caps imposed by the city council for certain city positions has created problems recruiting for key leadership posts in his administration. That included finding a chief of staff, whose salary was capped at $119,129. This month, the Toledo City Council approved a request from the mayor to increase the chief of staff salary cap to $125,000. (Katy Crosby, the executive director of the the Human Relations Council in Dayton, Ohio starts as Kapszukiewicz’s chief of staff on March 5.)

Late last year, when Kapszukiewicz was mayor-elect, he told a room full of Toledo business leaders about the salary constraints, the private sector reaction was one of disbelief. “The room guffawed. It was a rumbling guffaw of laughter,” the mayor told The Blade. “They just looked at each other and couldn’t believe what the salaries were.”

It’s not uncommon for low pay to prompt key city hall and state government staffers to bolt for the private sector. When Pittsburgh Mayor Bill Peduto’s chief of staff, Kevin Acklin, resigned his $107,000-a-year position in December, he cited higher salaries in the private sector and the need to better support his family.

The Pittsburgh Post-Gazette compared Acklin’s salary to other mayoral chiefs of staff and found that “his salary is indeed relatively low for his job.” Allentown and Harrisburg, which have smaller populations than Pittsburgh, have higher salaries for their respective mayors’ chiefs of staff.

To sample a couple other mid-size cities: In Richmond, Virginia, with a population of 220,000 residents, Mayor Levar Stoney’s chief of staff has a $125,000 salary. In Birmingham, Alabama, which has a population of around 210,000 people, the salary of the Mayor Randall Woodfin’s chief of staff in 2016 was $160,000, which was more than the mayor’s own salary.

Toledo has a population of approximately 280,000 residents. “Taxpayers of Toledo are understandably interested in making sure that their tax money is being spent wisely, and there is always a reticence to increase the taxpayer-supported salary of any government employee. I get that,” Kapszukiewicz told The Blade. “But going through this process truly helped me understand that we are missing out on talent because the wages we pay are utterly noncompetitive.”

The Blade’s editorial board recently called on the Toledo City Council to do a comparison of salaries in similar municipalities to ensure that Ohio’s fourth-largest city is able to attract and retain top talent.

While Toledo’s new mayor may have had a wake-up call when it came to the city’s uncompetitive salary constraints, many government leaders and human resources managers are well familiar with this particular pain point.

It’s not just an issue for top administration and agency postings. It’s common throughout state and local government workforces. According to Route Fifty’s 2018 Management Survey, a majority of state and local government respondents did not agree with the statement: “My organization is competitive with the private sector in our ability to attract and hire talent.” That sentiment was common across rural, suburban and urban areas and throughout state and local government. In fact, nearly three-fourths of state government respondents disagreed with the statement on recruiting and hiring top talent.

(Route Fifty’s 2018 Management Survey)

It’s an issue that’s especially challenging when it comes to filling positions in cybersecurity and other areas of government technology management, as Route Fifty has previously reported.

Last October, Stanton Gatewood, Georgia’s chief information security officer, told a gathering of the National Association of State Chief Information Officers in Austin, Texas that the “private sector is sucking the public sector dry everyday.”

Michael Grass is Executive Editor of Government Executive’s Route Fifty and is based in Seattle.

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