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Big wave of retirements will reshape state workforce

Connecticut is about to undergo a turnover in state employees unprecedented in its history. This presents a challenge in assuring that services are adequately maintained. But it also presents opportunities — to find savings, to make government more efficient, and to diversify the state workforce so that it better reflects the populace.

Driving the coming turnover is the fact that a significant percentage of the workforce is moving into the retirement age and that union concessions have added to the incentive to retire sooner rather than later. Currently, retired state employees are guaranteed an annual minimum 2% cost-of-living adjustment, even if actual inflation falls below that number. For those who retire after July 1 that minimum ends, though the maximum up to 7% remains. For some, health care costs could also rise if they delay retirement.

study by the Boston Consultant Group, released last March, estimated that 8,000 of the 30,000 executive-branch employees will be eligible to retire by that July 1 date and that about 70% are seriously considering doing so. State union officials expect the number who actually retire will be significantly lower. In any case, it should be a large number.

The study did not cover the 20,000 employees working in the judicial, university and state hospital systems.

Some savings will come naturally. Veteran workers retiring at higher pay will in most cases be replaced by entry-level employees at lower wages. Long term, new hires will enter the state workforce with pension benefits — and 401-K style plans — that will be far more affordable for the state than the high-end pension plans of the retiring workers.

As for those who say this is a chance to trim a bloated state workforce, the data does not back that contention. At about 50,000, the number of state employees is down nearly 10,000 from 2009, when the need to address a series of budget deficits and boost payments into the underfunded pension system resulted in the workforce shrinking through attrition.

Ideally, strategies to manage the anticipated turnover in workers would come in coordination with state employee unions. But realistically, that will be difficult.

Related Content: Gov. Lamont Is in Public (Union) Service

The consultant study notes that efficiency and savings could come, for instance, by making it easier for workers to transfer within and even between departments to meet staffing needs. State unions have long insisted, through collective bargaining, on strict job classifications that prioritize worker protection over management flexibility.

That same study also sees the potential for savings by continuing to shift more human services — such as group homes and outreach programs — from state agencies to nonprofits that contract with the state. We back this shift, with the provision that these nonprofits are adequately compensated and their workers get fair health benefits. Given that a large proportion of state worker retirements are projected to come in this sector, the savings could be significant. But, again, no one should expect the state unions to embrace that effort.

Other savings, as seen in the private sector, could come from utilizing technology to provide more services online, to reduce the need for office space because work can be done remotely, and to address wasteful department overlap and bureaucratic entanglements.

The study estimated $600 million to $900 million in annual savings could be found.

What cannot happen is for this or future administrations to allow the unions to dictate how this plays out. The unions will stake out positions to the best benefit of their members — that’s their role — but Gov. Lamont and any future governor must push back against attempts to institutionalize inefficiencies through labor contracts.

The coming wave in retirements, however high it crests, will also be a chance to transform a state workforce now dominated by white males in many agencies to one that is more racially, ethnically, and gender diverse. Hispanics are particularly underrepresented.

This does not require strict quotas. It requires making sure recruitment reaches all communities, including working with community-based partnerships to find job applicants. It means coordinating with high schools, community colleges and the state university system to make sure education, training and career opportunities line up with the future state needs. In some cases, it may mean offering additional training, and the financial help to get it, to match job applicants with job openings.

None of this will be easy. Success won’t necessarily translate into the scoring of political points. But it sure is important.

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