A recent report, made available online by the New York City Independent Budget Office, offers important insights into New York City’s municipal workforce.  The workforce is aging, with more than one-third eligible for retirement by 2017.   City leaders need to think boldly about how best to reconfigure the City’s compensation and hiring practices to attract a young and skilled workforce in coming years. 

The 2013 Workforce Profile Report shows the City’s municipal workforce is older than the general workforce of New York City and of New York State.  At the end of fiscal year 2012, 23 percent of the City’s municipal workforce was over age 55, compared to 20 percent of New York City workers and 22 percent of New York State workers. Less than one-quarter of City municipal workers were between 20 and 34 years old, in contrast to approximately one-third of the general New York City and State workforces.

One reason the City has a more senior workforce is public pension plans are structured to reward seniority and an extended length of service.  At the end of fiscal year 2012, almost one-quarter of the City’s municipal workforce had at least 20 years of service with the City, and 19 percent were eligible for retirement with full benefits.  The report notes an additional 15 percent will be eligible for retirement within five years—meaning that more than one-third of the City’s most experienced workers have the option of leaving public service during the new mayor’s first term.[1]

Short-term retirement eligibility surpasses 40 percent for several categories of city workers: skilled craft workers (61 percent); officials and administrators (53 percent); administrative support (51 percent); and professionals (43 percent).  Since fiscal year 2007, only 2 percent of the total workforce – approximately 7,500 employees in fiscal year 2012 [2]– retired in a given year; however retirement rates vary by category of worker each year, and were as high as 20 percent of those eligible among protective service workers in fiscal year 2012.[3]

As the ranks of workers eligible for retirement grow, it is imperative for Mayor de Blasio and the City Council to think broadly about strategies for attracting qualified workers to public service.  In particular, they should focus on two issues.

First, City employees need more flexible retirement options.  The City offers an attractive package of compensation that includes competitive wages and relatively generous fringe benefits, but its pension system does not encourage job mobility.[4]  A defined contribution retirement plan, which allows for quick vesting and portability of benefits, would be attractive to many younger workers– particularly “millennials” who seek mission-oriented employment, but expect to changes jobs, or even careers, several times in the course of their working lives.[5]

Second, city leaders should convene a task force to analyze city operations and staffing.  City services should evolve with technology, changing needs, citizen expectations, and data on performance, and the recruitment and organization of the city’s workforce should be adapted similarly, with an emphasis on attracting and hiring the best candidates, empowering employees to serve the agency’s mission, and promoting employees on the basis of achievement.   Updating civil service rules and collective bargaining agreements to reflect modern expectations about work will be necessary to attract young talent.

By Maria Doulis

[1] City of New York, 2013 New York City Government Workforce Profile Report (December 2013), pp. 12, 26, www.ibo.nyc.ny.us/iboreports/2013workforceprofilereport.pdf.

[2] Based on 2.3 percent retirement rate in fiscal year 2012 on a full-time and full-time equivalent headcount of 327,793. See City of New York, 2013 New York City Government Workforce Profile Report (December 2013), pp. 7, 23, www.ibo.nyc.ny.us/iboreports/2013workforceprofilereport.pdf.

[3] Includes police officers, firefighters, correction officers, and others. City of New York, 2013 New York City Government Workforce Profile Report (December 2013), pp. 25-26, www.ibo.nyc.ny.us/iboreports/2013workforceprofilereport.pdf

[4] As the IBO notes, the median salary of a City employee in fiscal year 2012 was $65,299, far greater than the median salary of the average New Yorker: $34,019; see Independent Budget Office of the City of New York, “Report on Pay, Demographics of Municipal Workforce Slips From Sight on Bloomberg Administration’s Last Day,” IBO Web Blog (February 5, 2014), http://ibo.nyc.ny.us/cgi-park/?p=819. For information on comparative health insurance benefits, see Citizens Budget Commission, Everybody’s Doing It: Health Insurance Premium-Sharing by Employees and Retirees in the Public and Private Sectors (January 2013). For information on comparative pension benefits, see Citizens Budget Commission, The First Priority in the New Year: Pension Reform (January 2012).

[5] Jeanne Meister, “Job Hopping Is the 'New Normal' for Millennials: Three Ways to Prevent a Human Resource Nightmare,” Forbes (August 14, 2012), www.forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normal-for-millennials-three-ways-to-prevent-a-human-resource-nightmare; and Claire Raines and Arlene Arnsparger, “Millennials at Work,” Generations at Work (2010, accessed February 11, 2014), www.generationsatwork.com/articles_millennials_at_work.php.