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Dean Pete Peterson on "The Greatest Public Leadership Transition in American History" | Real Clear Policy

The Greatest Public Leadership Transition in American History

ByPete Peterson | July 1, 2016 | Real Clear Policy

We’re on the brink of the greatest public leadership transition in American history. And I’m not talking about the 2016 presidential election. In the next three years, more than half of senior-level managers in the public sector are due to retire — from local and state governments across the country to the federal government. This is known in policy circles as the “Silver Tsunami.” Are we prepared for it?

Municipal government expert and former Bay Area city manager Frank Benest calls this looming transformation the “quiet crisis.” He estimates that 58 percent of current manager-level, local government employees will retire before the next president’s term is over. The situation may be even worse at the federal level. A recent study by the Partnership for Public Service and McKinsey found that 85 percent of the fed’s Senior Executive Service—about 7,000 of the top managers in government—will be eligible to retire in the next ten years.

I saw this up close a few months ago when a pair of job recruiters from the City of Los Angeles came to visit at Pepperdine School of Public Policy. In somewhat desperate tones, the officials told students that 48 percent of current manager-level personnel are due to retire by the end of the decade. They begged students to apply to fill these jobs, from land use planners to public safety officers.

Why is this wave of retirements coming first to the public sector? There are two reasons. First, public sector workers are on average 5-7 years older than their private sector counterparts by. Second — and related — the compensation structure of most governments, whether local, state, or federal, has incentivized millions of baby boomers to hold on to their senior positions.

Responding to this crisis demands creativity and nimbleness — two qualities for which the public sector is not known.

First, hiring practices in the public sector will need to better approximate those in the private sector. And rather than simply promoting from within, governments are going to have to attract mid-career workers from outside government in order to deal with the coming massive personnel shortfall. 

We see this happening already in the United States military, of all places. Secretary of Defense Ash Carter recently announced his “Force of the Future” human resources reform strategy, which proposes “lateral entry” by civilians into even senior leadership positions. Carter argues that “allowing the military services to commission a wider segment of specialized outside talent … will make us more effective” and attract top talent in particular areas — from technology to logistics.

Work environment and compensation structures in the public sector are also going to have to change. The federal government’s recently created internal web agency, 18F — started in the wake of the Affordable Care Act roll-out debacle — provides a glimpse of what the future might look like. Though based at the corner of 18th and F streets in Northwest Washington, DC, many of the agency’s 200-plus employees work remotely throughout the country — and many from home offices. In contrast to the usual decades-long career perspective on hiring, 18F employees sign up for only two-year appointments, with the possibility of a second, two-year renewal. Shorter stints with higher pay and faster promotion are appealing for younger workers looking for maximum experience in a short period of time.

Government workspaces are also changing to be more inviting to younger workers. On a recent visit to the City of Palo Alto’s re-designed IT department, I felt like I was walking into a web startup with its open floor plan, modern furniture, and, of course, white boards throughout.

Government, itself, has been getting “smaller” over these last few years. And the coming “tsunami,” in combination with cash-strapped municipal budgets and technological changes, will only accelerate this trend. 

Unlike almost any other economic sector, government employment in the United States remains 500,000 jobs below pre-recession numbers. As Governing magazine reported last year, California cities like Santa Ana and Chula Vista are operating with nearly a third fewer employees than their pre-recession peaks. The growing number of public-private partnerships and contracted services have helped to create what McGill University professor Henry Mintzberg recently called the “plural sector” — the collaborations of government-private-nonprofit sectors to address problems that were previously only government’s domain.

In addition to impacting the private sector, technology is also making many public sector positions obsolete. A 2016 report from the World Economic Forum forecasts that almost five million “white collar” jobs carrying a “limited skillset” will disappear from the public and private sectors by the end of the decade. The report concludes: “For a talent revolution to take place, governments and businesses will need to profoundly change their approach to education, skills, and employment, and their approach to working with each other.” 

This is great news for graduate programs in public policy like mine. But responding effectively to this historic transition in America’s public leadership will demand creative educational products for future public servants, combined with a public sector willing to change how it views the traditional career track. The result could be nothing less than a revolution in how we “do government” in the United States.

Pete Peterson is Dean of the Pepperdine School of Public Policy.