Hiring is up — with one major exception.

While the private sector has fully recovered the 21 million jobs it lost during the pandemic (and then some), the public sector still employs 664,000 fewer workers than it did before spring 2020. State and local governments are the most short-staffed, causing major hang-ups for essential services like healthcare, education, public safety, and transportation.

The reason why public sector employment is down is the same reason why private sector employment is up: voluntary turnover. In fact, 8 in 10 public sector employers say workers who quit of their own accord are the main reason behind the increase in job openings that go unfilled.

What drives public sector employees away?

In an airtight labor market, businesses must adapt quickly to attract talent and keep existing employees happy.

But when it comes to increasing wages or offering competitive signing bonuses, stricter budgets and predetermined pay grades mean that public sector employers often struggle to keep pace with their private counterparts. And after many public service workers were forced to dip into savings or take on more debt to make ends meet in recent years, a bigger paycheck — and the chance to regain financial health — is an offer few can turn down.

Another emerging employee demand that the public sector often struggles to address: work-life balance. Public service workers — especially those from high-pressure professions like teaching and healthcare — are flocking to private sector employers that support holistic wellbeing. As a result, rising turnover fuels a cycle of chronic stress that pushes employees away: 82 percent of public sector HR leaders say widespread staff burnout is the result of hiring challenges.

And while robust benefits packages have attracted employees to public sector jobs in the past, a recent survey found that less than a third of public service workers are satisfied with their nontraditional benefits. In contrast, nontraditional benefits are on the rise among private sector employers — and for good reason. Not only do holistic benefits engage current employees, but perks like paid volunteer time off and fertility care can also appeal to the growing number of job seekers who want to work for a company whose core values are in alignment with their own.

How public sector employers can gain an edge

Public Service Loan Forgiveness (PSLF) is an Education Department-sponsored program that forgives a borrower’s remaining federal student debt after ten years of full-time work in the public sector.

PSLF should be public service employers’ biggest competitive advantage over private employers for recruitment and retention. Debt forgiveness — and the improvements to mental and financial wellbeing that come with it — should be more than enough to keep public sector jobs in high demand.

But in reality, the program is prohibitively cumbersome for borrowers to navigate — if they know it exists at all — and requires employers to complete tedious, manual paperwork in order to verify workers’ applications. In turn, PSLF goes severely underutilized: less than eight percent of eligible borrowers apply, and just two percent of all-time applicants have been approved.

That’s why we built a solution that digitizes and simplifies the end-to-end PSLF experience. Employees can check their eligibility status, track payment history, and request employment certification from our all-in-one student debt savings and optimization platform, while our automated system goes to work to reduce the time it takes for employer admins to process employee certification forms. So far, two thirds of employees who apply for PSLF via Candidly are first-time applicants, and the administrative burden for employers has been cut to an average of just 79 seconds per certification request.

The impact: public sector employers are empowered to attract and retain a highly-educated workforce — for the long haul — with a financial wellness benefit that makes debt forgiveness exponentially more attainable for employees.