Public service employers may see workforce pressures mount this year as MissionSquare Research Institute has identified six trends it believes will affect hiring, retention and retirement decisions in 2025.
The Washington, D.C.-based institute based its findings on recent research that it said points to strategies government agencies can use to address challenges such as employee motivations, succession planning, emerging technologies and mental health supports.
MissionSquare said the first factor involves recognizing why people are drawn to public service. It cited survey responses indicating a desire to help communities and see results beyond a bottom line. Employers may need to communicate these motivations more than once and in varied ways, the institute said.
Succession planning emerged as a second concern, with just 13 per cent of surveyed HR managers in state and local governments saying they have a process in place, MissionSquare said. “With more than half of those HR managers indicating that the largest wave of retirements is coming in the next few years, … the time for postponing such planning is long since passed,” the institute said. It added that planning should go beyond picking deputies, focusing instead on building a broad pool of qualified candidates through professional development and cross-departmental projects.
A third trend involves how employees feel about emerging technologies, including artificial intelligence. MissionSquare said it is conducting a survey on how public-sector staff view AI, adding that results may help employers support workers through education, training and targeted benefits.
Debt, stress and mental health ranked fourth among the trends. According to the institute, 46 per cent of public sector employees with student loans said debt is a major problem, and stress can be especially high in fields like public safety or health care. MissionSquare said normalizing discussions about debt and offering workplace supports could help retention.
The fifth trend highlights differences between what public-sector employees expect for retirement and their actual experiences. The institute said major life factors such as health, age, wealth and marital status often mean workers retire earlier than planned. It recommended flexible retirement options and improved financial education.
Finally, the sixth trend focuses on defined contribution (DC) plans and how default investments, such as target-date funds, influence saving and investing behaviour. MissionSquare said public-sector participants tend to stick with default options at high rates, but acceptance declines with age. The institute noted that understanding default choices could help employers fine-tune retirement programs.
MissionSquare Research Institute describes its role as identifying practices and studying workforce issues in government and non-profit sectors. Its work examines retirement plans, wellness benefits and other topics affecting public employers.
The six trends
| Trend | Key Points |
|---|---|
| 1. Differentiating motivations to work in the public sector | Public service attracts employees motivated by community impact and fulfilment. Employers should use targeted outreach and plain language communication to highlight these benefits. |
| 2. Kickstarting succession planning | Only 13% of public employers have succession plans. Organizations should prepare broader pools of talent through mentoring, cross-departmental teams, and professional development. |
| 3. Addressing concerns about emerging technologies | Public employees have mixed feelings about AI and automation. Employers should focus on education, training, and tailored benefits to increase confidence and productivity. |
| 4. Talking openly about debt, stress, and mental health | Financial and emotional stress impact many workers. Public employers can support employees by normalizing conversations and offering tailored programs. |
| 5. Recognizing gaps in retirement expectations | Many employees retire earlier than expected due to life factors. Flexible retirement options and financial education can help bridge expectation gaps. |
| 6. Designing DC plan default investments | Defined contribution plan defaults like target-date funds are widely accepted. Understanding participant behaviour can improve retirement planning. |
