As costs of living continue to increase, public sector employees find their financial health in a tailspin. Overall financial well-being has fallen by one-third year over year. And nearly 7 in 10 public sector employees are concerned at their ability to pay down debt, up from just 41% in 2023.
These financial stressors are impacting workers’ perceptions of their employers, too: More than one-third of public sector employees who rate their financial health poorly say they’re not paid enough for the work they do.
Against this backdrop, the “old playbook” for talent management has become less effective
Public sector employers have traditionally relied on purposeful work and great benefits to attract and retain their talent. And, for the most part, Boomers and Gen X were willing to accept this tradeoff for slightly lower wages compared to the private sector.
But for young talent, squeezed with record-high student loans and rising costs of living, compensation has become more important than ever.
Younger public sector employees’ sense of purpose is falling, with less than half of Millennials now saying they feel a strong sense of purpose at work. Compensation and salary remain at the top of Millennials’ “must haves” when deciding to choose a new job or stay at their employer, and compensation is now considered more important to public sector employees than those outside the public sector.
Benefits satisfaction is on the decline, as well: