Caught in the Vise

At a time of austerity, what can be done to keep public employee compensation competitive and sustain workforce quality?

As the federal and state budgets face deficits, and as those problems make their way down to the municipal level through cuts in grant and aid programs, there’s an issue no one seems to be talking about.

A lot of the budget cuts at all levels are falling on employees through pay freezes and reductions in benefits. That trend shows no sign of abating soon. So the issue is: At what point does compensation for public workers — field crews and office staff alike — become so unattractive that good people simply leave? And remember, the best people always can.

I’m not going to bring in the issue of unions and bargaining rights, which seems to get most of the attention. My question deals with people, dollars and cents. Public agencies have to compete for quality people, just as private businesses do. What happens if the public sector begins to look like nothing but a dead end, with a future of declining pay and lack of opportunity?


Public vs. private

A lot of people complain that public workers are paid too much, especially in benefits. But there’s a key difference, seldom mentioned, between the public and private sectors. If I go to work at a large business, at whatever level, nothing says I can’t work my way high up the ladder, even into the executive ranks, and ultimately earn a spectacular salary.

If I go to work for Any City, USA, I can only go up so far. Even if I become a department head, I am not likely to see a six-figure income (unless Any City happens to be a big one). So in effect I trade upward mobility for predictability, less pressure, good benefits and job security.

But if the benefits are no longer so good, if annual budget cuts mean the constant threat of layoffs, and if persistent shortages of funds mean increasing pressure to do more with less, then where is the upside to public jobs?

One could argue that maybe public employment shouldn’t be a career proposition — that people who want more opportunity can simply leave after a while for private business. Fine, but if the good people are always leaving, where is the base of experience on a municipal team? What if the only ones who stay are those who can’t get jobs anywhere else or those who are willing to stay on out of pure public spirit?

Isn’t there a great deal of value in the 50- or 60-year-old public employee with decades of experience and a head filled with institutional knowledge? Doesn’t that person deserve a financially rewarding life?


Time for innovation

In my role as editor at MSW, I regularly run across incredibly bright and dedicated people who add huge value to their communities. How do we continue paying people like that enough to keep them from jumping to the nearest engineering or IT firm or private utility, where there’s no cap on their financial future?

There’s a balance to be struck here. The well of tax money (or ratepayer money) is not infinite, and we’re never going to see equal financial opportunity in the public and private sectors. So we may need to start doing some things differently.

Marietta Water, subject of this month’s “Human Side” column, is one innovator. Department director Bob Snelson has made it a requirement that his people attain appropriate levels of certification in water distribution and wastewater collection.

The initiative proves that employees respond to rewards other than money: Morale and retention have improved significantly as people gain a sense of pride and professionalism and a belief that their employer cares about them.

Yet Snelson hints in the article that there’s an issue brewing over compensation for these increasingly qualified and valuable people. Opportunities to advance are limited in a relatively small agency, and the city is looking for ways to structure pay to increase rewards for longevity.


What’s your story?

This issue is not going away. Maybe ways need to be found within the structures of unions and civil service to fast-track exceptional workers, to provide merit bonuses, or to create something akin to profit sharing for people and teams who find ways to do things more efficiently and save money for the community. (Would “savings sharing” be an appropriate term?)

MSW would be interested in your perspectives on this issue. Have you developed any innovative programs that help reward and retain your best people? Send me your comments to I promise to respond, and we’ll report on the ideas we receive in a future issue.


Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.