The State Government Workforce Crisis: What It Means for Service Delivery

State governments across the country are facing a workforce crisis that threatens their ability to deliver essential services. Since early 2020, the number of job vacancies in state and local governments has more than doubled, according to research compiled by the National Association of State Personnel Executives. In North Carolina, the statewide vacancy rate reached 23.4 percent in December 2022, nearly double the pre-pandemic level of 12.7 percent. While that figure has improved somewhat, it remains elevated at roughly 20 percent. The consequences are tangible: understaffed agencies struggle to process permits, inspect facilities, manage cases, and respond to constituent needs in a timely manner.

The root causes extend beyond compensation, though pay certainly matters. State agencies compete for talent against private employers who can often offer higher salaries, remote work flexibility, and faster hiring processes. Government hiring timelines frequently stretch to months, causing qualified candidates to accept other offers before agencies can extend them. Meanwhile, an aging workforce compounds the problem. According to recent surveys, 54 percent of state and local HR professionals expect the largest wave of retirements to occur within the next few years. When experienced employees depart, they take institutional knowledge with them, leaving remaining staff to manage increased workloads with less expertise.

North Carolina illustrates these dynamics clearly. Agency heads have publicly stated that current funding levels are inadequate to attract and retain the workforce needed to fulfill their missions. The state’s Department of Insurance, for example, reported that its team of 50 criminal investigators was called to investigate more than 7,600 cases of possible insurance fraud in a single year, a caseload that leadership describes as barely scratching the surface of the problem. When budget constraints prevent agencies from filling positions or offering competitive compensation, service backlogs grow and fraud goes unaddressed.

The operational implications extend beyond individual agencies. When permit offices are understaffed, construction projects stall. When health inspectors cannot keep pace with their workload, public safety risks increase. When case managers carry unsustainable caseloads, vulnerable populations receive inadequate support. These service gaps erode public trust in government effectiveness and create downstream costs that often exceed what adequate staffing would have required in the first place.

Addressing the state government workforce crisis requires both immediate tactical responses and longer-term strategic changes. Agencies can streamline hiring processes to reduce time-to-fill, expand recruiting beyond traditional channels, and develop retention programs that recognize the contributions of existing staff. They can also document critical processes to preserve institutional knowledge and cross-train employees to build organizational resilience. For state leaders navigating these pressures, external support can help diagnose operational bottlenecks and implement practical solutions that improve service delivery within existing resource constraints.