Public finance officials form a quiet bulwark against the chaos that might otherwise ensue from the complexities of running the government. At the local level, they tend the financial mechanisms that keep parks open, schools staffed, and garbage collected. At the state level, they oversee massive investments made in major infrastructure and services.Whenever there is a public debate over taxes and spending, it depends on these officials tracking what is coming in and going out.
It’s a problem, then, that they’re getting older.
A new study of the public finance workforce by Emsi Burning Glass in collaboration with the National Association of State Treasurers found that 60% of public finance employees were over the age of 45, with 31% over age 55. Impending retirements are expected to outpace those of comparable private sector positions.
Public Finance: An Attractive Option For Early Career Workers
There are several reasons public finance can present compelling advantages to potential recruits.
Public finance jobs actually have a slight pay advantage over private sector for early and mid-career workers. That’s not including the substantial benefit packages, including pensions and accrued leave, that often come with a civil service job.
Public finance jobs also often have lower barriers to entry than their private counterparts. Thirteen percent of public finance job postings do not call for a bachelor’s degree–more than half the number in the private sector. And 48% require less than two years of experience.
Public finance is more likely to employ both women and Black workers compared to their representation in the national labor pool. And because public finance workers are a necessity in every municipality across the country, there’s no automatic requirement to move to expensive superstar cities like New York, as there is with many private finance jobs. This ability to take advantage of lower cost of living may in some cases amount to a de facto pay advantage.
Public finance jobs are demonstrably good jobs. The next step is communicating this fact to the new generation that will hold them.
Public vs. Private
It’s important to recruit public finance professionals at the earliest stages of their career. In general, private sector finance professionals tend not to transition to the public side. For that matter, public employees are usually in no hurry to leave their chosen profession of civil service : only 1.1% of profiles list a transition from a public finance job to a private finance job.
The dynamic may partially be due to a perception that salaries in the private sector are universally better than their public counterparts. But that’s not entirely true, as we discussed earlier. Finance professionals in management and executive roles–and thus likely at the apex of their careers–do earn 6% to 10% more than than their public sector counterparts. But at the early and mid-career stage, public finance actually has a slight advantage over private.
Perhaps most discouraging for potential public finance recruits, a wage gap exists even between some public and private finance jobs that require similar skills. For example, accounting managers in the public and private sector share 90% of the same skill requirements. But the latter makes over $6,000 more than the former on average.
The Shape of Public Finance
For this analysis, Emsi Burning Glass organized the many granular titles that constitute the public finance workforce into core functions, as follows:
Executive/ Principal Management: This function leads the operations and personnel, coordinates with other fiscal agencies, approves reporting, performs administrative, audit and support functions, and serves as the public face of the agency.
Budget Management This function is responsible for the organization’s budgeting and financial forecasting activities.
Banking / Cash Management This function is responsible for managing the cash and electronic transactions, relationships with the banking sector, and short-term investments.
Debt Management This function issues and manages bonds to enable the agency to finance schools, infrastructure, economic development, and other priorities.
Investments / Pensions Management This function manages public employee retirement funds and trust funds, invests assets, and maintains safety, liquidity and yield on behalf of residents and employees.
Legislative, Legal and Communications This function of external relations management supports the efforts to ensure that activities are compliant with applicable local, state and federal laws.
Consumer / External Programs This function coordinates the unique set of of Consumer/External programs each treasurer’s office maintains.
Of these core functions, Consumer and External Programs has the largest overall demand, with more than 30,000 job postings between 2019 and 2020. A subgroup within this category, Program Analysts, had the highest demand growth, with a substantial 31.24% annual growth between 2016 and 2020
But all the demand growth in the world doesn’t matter if you can’t find people to fill your jobs. Is there any hope for the graying out public finance labor force? Absolutely. With the right recruiting strategy that advertises the substantial benefits of a civil service career to a wide variety of often overlooked workers, the next generation of public financial professionals will emerge to carry the torch.