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Public Sector Benefits Can Offer a Hiring and Retention Advantage During the Great Resignation, According to MissionSquare Research Institute

February 1, 2022

As employers across the nation face unprecedented labor shortages, new research finds that benefits offered by state and local governments can help attract and retain workers even amidst the Great Resignation. Unlike many private sector jobs, nearly all public service workers have access to pension plans, health care benefits, and life insurance. Also, a majority have access to key quality of life benefits like paid leave, employee assistance programs, wellness initiatives, and defined contribution retirement savings accounts.

These findings are contained in a new research issue brief, Benefits of State and Local Government Employees, from MissionSquare Research Institute. Read the research. This research details the benefits provided to state and local government employees using recent data, primarily from the U.S. Bureau of Labor Statistics’ National Compensation Survey, among other national data sources and previous Institute research.

"This analysis gives us an informed look into the employee benefit offerings of state and local governments across the country," said Joshua Franzel, PhD, MissionSquare Research Institute Managing Director and author of the research. "Given the range of recruitment and retention challenges public employers of all sizes face in 2022, now more than ever it is important for state and local leaders to understand and optimize public sector benefits to be employers of choice."

The research also finds:

  • 86% of state and local workers have access to a defined benefit pension plan. Some 91% of employees with a pension plan are required to contribute to their plan at an average of 7.2% of annual earnings.
  • A little over a third of workers (38%) have access to a defined contribution retirement plan, with 18% participating. Fifty-two percent of state employees have access to one of these plans, relative to 34% of local employees, with 25% participating at the state level and 16% at the local level.
  • 89% of state and local employees have access to health care benefits, which may include medical, dental, vision, and prescription drug coverage components, with 78% participating. More specifically, 96% of state and 87% of local government staff have access to some combination of these benefits and 86% and 75% participate, respectively.
  • 38% of state and local workers have access to a health savings account (50% state, 34% local) and 71% have access to a health care flexible spending account (88% state, 65% local).
  • In the aggregate, a majority of state and local employees have access to paid leave and quality of life of benefits, except for paid family leave. For state workers, 25% have access to paid family leave, while nearly all (98%) have access to unpaid family leave. For local employees, 27% have access to paid leave, while 93% have access to unpaid leave.
  • While 30% of all state and local employees have access to long-term care insurance, this is the case for about half (51%) of those employed by states, but only 22% for local employees.
  • 83% of state and local employees have access to life insurance, with nearly universal participation, but access rates for short- and long-term disability benefits are far lower.
  • As of early 2021, there were approximately 18.5 million state and local government employees across all 50 U.S. states, filling positions in education, utilities, transportation, hospitals, and general administration, among other key responsibilities.
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