Gallagher surveyed public sector agencies about their top compensation and labor relations concerns. Results reveal talent attraction and retention challenges, among other insights.
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Public sector employers increasingly struggle to attract and retain talent with competitive wages and benefits, while supporting work/life balance. More than 150 agencies responding to a September 2024 survey shared details about 2024 and 2025 salary increases, challenges in finding quality talent, and HR and labor relations issues they anticipate in 2025, among other topics.

Survey participants included cities and towns (41%), special districts (26%) and counties (9%), as well as public schools, libraries, housing authorities, transit authorities, utilities and others. Agencies employed an average total of 1,025 employees, including full-time, part-time and seasonal workers.

Key insights

  • Cost of living adjustments (COLA) for 2024-2025 ranged from 1.0% to 6.0%, with a weighted average of 3.23%.
  • The COLA weighted average for 2025-2026 was 3.20%.
  • Sixty-five percent of those responding reported losing a top candidate after the job offer because of a competing offer or inability to meet salary or remote/hybrid work arrangements.
  • Toughest positions to fill included engineering, finance, IT, police and other positions requiring certifications or a degree.

Results summary for public sector compensation survey

VIEW INSIGHTS

Disclaimer

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.