In many regions with aging workforces, increasing salaries won’t be enough to fill federal job vacancies.
At the Federal Salary Council meeting in early November, a representative from Wayne County, Pennsylvania, argued that if job vacancies were filled, employment levels would meet the head count threshold to warrant inclusion in the New York locality area. The county borders on Pike County which is already included in the area. The Council members unanimously agreed and are recommending the change to the Pay Agent.
County employees are currently paid on the schedule known as Rest-of-US (RUS) so assuming the recommendation is accepted, they could expect a 15% increase in pay plus a possible base pay increase and for those eligible step increases.
Locality pay, paid to federal workers in areas where there is significant disparity between federal salaries and comparable private sector salaries, is generally nothing out of the ordinary. But Wayne County is very rural, bordered by the Delaware River to the east and New York State to the north. This is not the usual staffing situation where agencies have to compete in metropolitan areas with the country’s leading corporations. On a listing of the largest county employers, state and local agencies and hospitals are larger; the next larger are school systems, Walmart and a supermarket chain.
Wayne County got the answer local representatives wanted from the Salary Council, but only because the county borders a locality area. Rural demographics suggest vacancy problems will be commonplace for years.
But the county may find that the new designation and salary increases do not solve its problem. As with many rural counties, the population is relatively small, 52,800, and only 20% of the residents (over age 25) have at least a bachelor’s degree. Plus, only 11% of the residents are in the age bracket—aget 25 to 34—when career choices are typically made. Over half the population is 45 or older. The median household income is $52,161 (based on state data). It’s not a given that an additional $6,300 or $500 a month—the difference in starting salary for a GS 7—will attract truly qualified applicants to a rural area.
Normally, at Council meetings, it’s cities and towns that request the designation of a locality pay area or inclusion in an existing one. To support their requests, they submit data on hard-to-fill vacancies and skill shortages. Pay increases are seen as the solution. The Council report from May has a list of the places that initiated contact seeking pay increases. Most are cities—Boise, Idaho and Brunswick, Georgia are high on the list—but there are several counties.
Angelina County in Texas leads the list. Its demographics are typical—only 17% of the Angelina residents have at least a bachelor’s degree. The median household income in 2017 was $46,472. I would guess that the largest employers are state and local government, school districts and hospitals. It’s a three-hour drive from Dallas.
Here in Pennsylvania, I know Wayne County. I interviewed many county officials as part of project that resulted in the creation of the Pennsylvania Judicial System.
It’s similar to other rural counties in Pennsylvania. Going west, the median household income for the next county, Susquehanna, was $43,457. In all but 19 of the 67 Pennsylvania counties the median income is below $50,000. When the county is added to the New York locality area, a GS 7 new hire will start at $48,375.
There are countless locations in rural areas where federal salaries are at or above local market levels. In those largely rural states where the RUS schedule covers most GS employees, federal salaries are generally competitive. Kansas (average GS salary $67,065) and Iowa (average GS salary $65,360) are examples. When combined with federal benefits and the stability of federal jobs, federal jobs should be very attractive.
In many rural areas, increasing salaries is unlikely to solve vacancy problems. The workforces in those areas, both federal and non-federal, are aging. Young college graduates are moving to urban areas where career prospects and lifestyles are more attractive. Additionally, research shows that many young people living in rural areas do not have positive views of civic engagement, which influences their career plans. Current events in Washington could influence career planning for a generation.
The federal experience is consistent with recent reports across the country showing shortages in core occupations: teachers, police, skilled trades, healthcare, engineering, even taxi drivers. The list is long, and it’s affecting all sectors including state and local government. Of course higher salaries help—that is always true when employers compete for talent—but the shortages, driven by demographics, are inevitable.
According to Census data, rural areas contain 19% of the population, or roughly 60 million people. Federal agencies are prominent local employers in rural areas. Millions of citizens in those areas look to federal agencies for information or services important to their lives. However, where the local staff is small, the inability to fill vacancies could disrupt federal services.
There are over 3,000 counties but only 500 or so are included in a locality area. The RUS salary schedule covers huge regions across the country. The Salary Council report from last July included a list of cities and towns located in the RUS regions with estimated local pay gaps. The list included prominent cities like Nashville, New Orleans, and Salt Lake City that have not been designated as locality areas but are clearly not rural. The gap estimates show GS salaries in those cities are not competitive but in rural areas employers tend to be local and smaller, with few highly paid professionals and managers.
Within the RUS regions there are thousands of federal sites where GS employees work. They range in size from large military bases to Social Security offices. It’s worth highlighting the more prominent rural agency operations:
- The Agriculture and Interior departments focus on rural areas. Both were created and are organized to support rural services.
- The Veterans Affairs Department has reported vacancies in excess of 40,000 in the Veterans Health Administration. With almost 5 million veterans residing in rural communities and the national shortages of medical specialists, needed care could be dangerously delayed. It’s central to the reason Congress established the Office of Rural Health.
- The Bureau of Prisons operates 122 prisons, with the majority purposely located in rural areas. The situation described recently in Government Executive is dire.
- The list of military bases is long—from recruiting stations to sprawling military installations, every state has one or more Defense facilities. The Federal Wage System, which was developed to ensure federal blue-collar workers are paid prevailing private sector rates, is a model for aligning workforce and staffing plans to be competitive locally and it could be modified for the GS workforce.
- The Social Security Administration notes on its website that it serves nearly 41 million visitors a year in 1,400 offices across the nation, many of which are located in rural counties.
- Federal courts rely on a staggeringly complex salary system with pay rates that mirror the RUS schedule.
The rural vacancy problem will at times affect every agency with staff outside of metropolitan areas. Whenever an experienced specialist retires, the availability of qualified candidates—or more accurately, the lack of qualified local residents to fill those vacancies—will determine if and when replacements can be added.
Agencies need to confirm that non-competitive salaries contribute to staffing problems. That may be difficult if surveys are not available, but employment and search firms and websites like Glassdoor should be helpful.
Some agencies may have plans in place to avoid problems as vacancies occur but if not, here a few recommendations:
- Anticipate retirements; workforce planning is essential.
- Learn from search firms about proven employment practices in the local area. Rural federal offices could be an employer of choice.
- Hold regular employee focus groups to identify areas where improvement is needed. Involve staff in planning and implementing needed changes.
- Make reskilling part of the workforce strategy. Many employees who retire will find a new job; for high performers, it should be with the same agency.
When salaries are generally competitive, agencies need to understand and be more responsive to what new graduates are seeking; it lists jobs but is silent on career opportunities. The USAJOBS website fails completely to help solve the Wayne County vacancy problem; it lists jobs but is silent on career opportunities. In rural areas agencies need direct hiring authority.