5 Ways to Overcome the Hiring and Retention Crisis Without Raising Pay

Faced with high turnover and dropping job applications, states and localities are growing increasingly desperate to fill vacancies and to keep employees onboard. Pay increases are one route to improved hiring and retention as we wrote in a recent column. But not only are compensation changes difficult to make, they’re only one road to take.

Fortunately, states and localities have a range of other options. Five of them follow, garnered from a number of interviews we conducted over the last two months. In the spring of 2022, it’s still early to judge the ultimate success of these initiatives, but based on our conversations, we’re confident that some combination of them can make a dramatic difference. 

Focusing on Leadership

An old saying in human resources is that “people don’t leave jobs. They leave supervisors.” To turn that idea on its head, good supervisors can help keep employees from marching out the door. Based on Gallup research, about 70% of the variation in team engagement—in both public and private sectors—goes back to the quality of a team’s manager.

How to find good leaders? Jim Harter, chief scientist for Gallup's workplace management and wellbeing practices, suggests “being systematic about picking managers, and then educating and training them to improve the engagement of their teams.” 

South Dakota’s commissioner of human resources, Darin Seeley, has intensely focused on this effort by providing training for supervisors and managers, as well as paying attention to hiring and promoting individuals whose skills lend themselves to leadership positions. “We have to provide leaders with training and knowledge and expertise,” he says. 

An early measurement shows the state is making progress. In a South Dakota employee survey that was analyzed in March, the “supervisory effectiveness score” rose from 68% in 2017 and 2019 to 75% in early 2022. That score is based on employee input on a variety of elements including whether supervisors provide work-life balance, keep employees informed of change and provide useful and timely feedback.

Improving the Hiring Process

Many governments are focused on pulling back on the number of days it takes to hire. At a time when there’s a shortage of workers, keeping people waiting to hear whether they’ve been hired can easily mean losing them to another entity.

Improvement in data collection and analysis helped Missouri accurately chart time to hire for the first time in 2020. It was able to do this by creating a single application process for the state, which provided consistent central data. That replaced past practices in which data was individually—and inconsistently—collected by dozens of agencies, or sometimes not collected at all.

The state has made a small dent on bringing down the number of days to fill positions. The baseline figure in 2020 was 65 days, which was reduced to 58 days in 2021. By comparing departments, Casey Osterkamp, personnel division director, was able to share promising practices that helped some agencies do far better than others in bringing down hiring time – for example, scheduling interviews while job announcements were still open and setting up texting to routinely communicate with applicants.

Emphasizing Training and Building Careers

While private companies have an edge on the public sector in compensation, state and local governments have the chance to stand out in offering career development opportunities. That’s because they provide a wide array of career options, all under the umbrella of a single employer. 

One way Kentucky sells itself in the marketplace of potential employees is by emphasizing the training it provides for its workforce. For example, a posting for an administrative section supervisor that pays $3,230 a month prominently features four items under the heading: “Holders of this job will obtain the following skills.”

In the interest of retaining employees and cutting turnover, supervisors and managers are encouraging employees to build career skills and aspire toward higher paid, more fulfilling employment, both in their agency and potentially within other state agencies. Linked software systems for training and performance appraisal allow managers to help employees find course offerings that they feel will help them grow in their jobs.  

Says Robbie Perkins, IT director in the Kentucky Department of Administration Division of Technology: “The ultimate goal is that they stay with the state and that they’re happy and don’t leave us because we struggle to get people.”

Strengthening Work-life Balance

Almost all people consider their workplace as only one part of their lives, and smart employers recognize this. A number of surveys show this is particularly important to the generation of workers getting started in their careers now. 

Nebraska has taken this into account with a longstanding emphasis on flexible schedules, and an increasing focus on employee benefits that are supportive of families.

Among its selling points for potential hires are special accommodations for pregnant women and nursing mothers and a pilot program that invites workers to bring their children into work when schools or day care may be unexpectedly closed. “We’re just trying to make this as friendly a workplace as possible,” says Kevin Workman, state personnel director.

An acceptance of remote work is also an important selling factor. In 2021, a survey revealed that 95% of Nebraska state employees preferred an environment that permitted work at home, as opposed to reporting each day to assigned central office space. The Department of Administrative Services has embraced this idea, reducing its office space from 38,000 to 17,000 square feet, and saving about $600,000 annually as a result.

Heightening Employee Engagement

When Matt Brown became personnel director in Indiana in late 2020, he realized that the state workforce had a problem with employee engagement. One clear signal was the poor participation rate in state employee surveys, which dropped from 30% in 2019 to 26% in 2021. When fewer people are willing to even communicate with their employers, that’s a bad sign. 

Brown, as well as his team, other agency directors and the governor, knew the engagement problem was affecting turnover, which had reached 25% in 2021, increasing from 17.4% in 2020. They also worried about its effect on applicants. 

To start building engagement, the Indiana executive branch announced a new set of policies Feb. 17 that largely took effect on March 7.  These changes, which overlap with the previous four initiatives we’ve identified, include allowing employees to use job time for health- and work-related training activities, expanding to 15 hours the time that employees can spend job hours on volunteer work and providing $5,250 in tuition reimbursement at accredited institutions for employees who have been on the job for 12 months.

Like many of the longer-term changes that are taking place, it’s too soon to see direct results. But even the announcement of the policy changes, coupled with some improvements in compensation, had dramatic impact. A new survey, filled out by employees between Feb. 21 and March 7, showed a doubling of the participation rate—to more than 50%.

Gallup research strongly supports the idea that Indiana is on the right track. “The likelihood of turnover goes down dramatically if you have highly engaged teams,” says Gallup’s Harter. While the impact on hiring may be a longer-term fix, it too is affected. “Engaged cultures will attract people from outside the organization who want to join. What happens internally goes external pretty quickly.”