Why public finance is critical for Diversity, Equity and Inclusion

Photo by Clay Banks on Unsplash

Did you know that your local government finance department is probably one of the most diverse in government? And, more likely than not, has a woman leading it? The Government Finance Officers Association released new research yesterday that looks at the public finance workforce demographics, trends and makes recommendations for recruiting. Below are some of the biggest takeaways.

Good news and bad news about public finance employment

First, here’s the landscape, as outlined by the report: State and local public finance totals of 1.15 million jobs across the United States, down from a peak of about 1.17 million before the Covid-19 pandemic. Interestingly though, the public finance sector was much more resilient to the pandemic than was the overall economy. While total jobs in the U.S. fell by 5% at the height of the crisis, public finance only shed 2% of jobs.

Looking ahead, local level public finance is projected to grow by 2% while state-level public finance is projected to stay approximately the same size.

Courtesy of the GFOA and Lightcast

I’m a “bad news first” kind of person, so here it is: The hiring crisis in public finance is already acute and it’s about to get worse.

Nearly 50,000 employees are already at retirement age and a whopping one-third will get there over the next 10 years.

• States where retirement risk is highest: Arkansas, Connecticut, Kansas, Maine, Massachusetts, Mississippi, Nebraska, New Hampshire, New Jersey, Rhode Island.

• Highest retirement risk positions: Property appraisers/assessors (41% of workers 55+ years-old), tax examiners and collectors, and revenue agents (39%); bookkeeping, accounting, and auditing clerks (39%); financial managers (38%).

Job demand is already incredibly high.

• Postings for state and local public finance positions are up 92% compared with 2019.

• Compare that to: 60% for the finance sector overall and 41% for the public sector. 

OK, on to the good news: State and local public finance departments are some of the most diverse in government—and also compared with their private sector counterparts. 

• Women make up 61% of the sector, compared with 45% of jobs in the finance sector overall and 55% in the public sector overall.

• People of color make up 38% of state and local public finance, compared with 28% of the entire finance sector and on par with 38% of the public sector.

The key takeaway from both of these is that diversity, equity and inclusion (DEI) has become a bigger part of government recruitment strategies in recent years and clearly, public finance is ahead of the game in some respects. Attention to DEI has grown in part because it’s important that the people in government mirror their communities. But also, many in HR know they need to expand their stale old recruiting pools and start looking in places that weren’t previously on their radar. (I.e., regional colleges and individuals with disabilities, to name a couple.)

Public finance departments can also be an HR recruiting ground. Employees can be tapped for leadership and other roles outside of finance as one way to build better diversity across all of government. However, given the current hiring situation, public finance departments will also be strained and need to expand their own hiring pools, as well as make some changes designed to retain talent. (More on recruitment and retention below.)

• Learn more: GFOA’s Diversity, Equity, and Inclusion Initiative

What is public finance’s DEI secret? Read on.

No B.A.? No problem!

A key part of public finance’s diversity may be in some of its higher-paying quality jobs, even (and this one surprised me) when compared to the private sector.