The Demand for More Public Sector Finance Workers

January 11, 2022

By Kari M. Arfstrom, Deputy Executive Director of Learning, National Association of State Treasurers

Like many job sectors, the public finance workforce is in critical need of new employees to backfill positions as the silver tsunami sweeps through local, county and state offices. There are an estimated 850,000 workers in these specialized roles throughout the United States.

This past September (2021), the National Association of State Treasurers (NAST) Foundation commissioned a national study of the public finance workforce specifically looking at the career opportunities in this sector. We wanted to “look closely and think broadly” about the entire range of public finance careers since it affects so many public agencies in both states and localities.

For many Americans, public finance officials are the face of government in a variety of ways.  People interact with them in a whole range of activities from filling out state tax forms to saving for higher education in 529 accounts to ensuring their tax dollars are spent wisely.

With that in mind, NAST has determined that it is critical to take proactive measures to promote a solid pipeline of individuals entering the workforce, as well as support our members in their efforts to recruit, retain and train their employees.

Key findings of the Public Finance Workforce Study include the following:

• The public finance workforce is growing with increased demand for all roles across all levels in government offices. The growth of related job postings ranged from a 6 percent increase in 2016 to a 31 percent increase in 2020.  Over the same time period, the public finance industry as a whole saw a 16 percent growth in job postings. The research considered four years of data to smooth out the initial impacts of COVID.
• The public finance workforce is ubiquitous. The increase in job demand is not concentrated in large urban areas, as might be anticipated but spans across all states and localities from the largest cities and states to the smallest hamlets.
• The public finance workforce is diverse with more women and Black people employed by public finance entities than the national average of all employed workers.
• The public finance workforce is aging. Over 50 percent of employed workers are over the age of 45; with nearly one-third over the age of 55. Impending retirements will outpace those in private sector finance firms. Whereas the entire U.S. workforce has 44 percent of employees aged 25-44, the public finance sector only has 39 percent.

Fortunately, the public sector breaks down many barriers that can traditionally prevent workers from getting finance-related jobs in the private sector.

For example, for people who do not have a baccalaureate degree, the public sector offers a greater share of opportunities relative to the private finance sector. While 74 percent of public finance sector job postings required a BA or sub-BA degree, the private sector listings were at 89 percent.

Similarly, requirements for prior job experience aren’t as much of an impediment in this sector in the public sector as in corporate America. Some 48 percent of public job postings require less than two years of experience in the public sector, compared with 29 percent in corporate America. At the other end of the spectrum, only 16 percent of public sector job postings called for six or more years of experience while 23 percent of those in the private sector did.

The members of NAST are choosing to meet these challenges head-on by defining them, and next creating a pipeline and retention resources to support the need. We have identified a number of advantages to a career in the public sector including:  the fact that positions are less influenced by fluctuations in the economy; there’s no need to fear mergers and acquisitions that might eliminate a job;  and job opportunities for states and local governments are geographically diverse.

Additionally, benefits, notably pension plans and opportunities for leave accrual are still available in the public sector to a far greater degree than in the private sector.

NAST is actively seeking national partners with whom to collaborate to extend the research, advance this sector, and conduct a national campaign to create the pipeline needed to fill these careers. The entire report and extensive appendices can be viewed here. Contact Kari M. Arfstrom, Ph.D. NAST’s Deputy Executive Director for Learning at kari@statetreasurers.org for additional information.