The Competition for Employees

(from Maine Townsman, November 2005)
By Douglas Rooks, Freelance Writer

Municipalities face the same competitive labor market that all Maine employers do. While the theme of “good jobs” remains a staple of the state’s political campaigns, and a frequent focus for bond issues, the state’s unemployment rate remains well below the national average. Particularly in southern Maine, the relative dearth of younger workers has pushed up wage rates and made vacancies, even in relatively stable workplaces like town government, more common.

Still, most municipalities are able to hire qualified workers at a price they feel they can afford, though that’s often less true for a particular job specialty, or in certain regions of the state. Interviews with town and city managers shows that while there are similarities statewide, each community has its own story, and its own sets of concerns. Wages and benefits, and the contrast with the private sector, has become a more prominent theme, as skilled workers are willing to change employers in response to better job offers.

David Barrett, MMA’s manager of personnel services and labor relations, says municipalities remain generally competitive in the job market, but observes that, “The whole economy is less stable and people move around more. People don’t stay with employers as long as they used to.”

One reason for that, he said, is the increase in two-income families. When one family member decides to move to a different job, it often means another employee moves, too, whether or not she or he had intended to change jobs.

Law enforcement is the one municipal specialty where Barrett does often hear of hiring difficulties. “Police departments with vacancies are finding the number of applicants is down sharply,” he said. Where a decade ago, a town may have had 50-70 applicants for a chief’s position, it would be lucky to get 20 today. Increased competition from State Police, where salaries have been upgraded, and the federal Border Patrol, expanded in response to post-Sept. 11 security concerns, are likely having an effect on the employee pool available to municipalities.

Don Willard, now town manager in Raymond, saw the competition for police officers first-hand when he spent 15 years as Rockport’s manager. Typically, smaller towns would hire young high school graduates who then went off to train at the state police academy. By the time they returned and had a year of experience, they would be hired away by larger departments offering better pay and benefits. “It’s a significant expense for small towns to train officers and then lose them,” he said – although it’s also a problem most towns have just had to get used to.

Willard has no such concern in Raymond, which doesn’t have a police department, but he did find a similar pattern among the firefighters and emergency medical technicians who staff the town’s ambulance service. Raymond found itself having to hire EMTs almost every year; several went to work in Cape Elizabeth, lured by higher pay.

Two years ago, Willard convinced selectmen that it was time to upgrade compensation for paramedics, and the move paid off. “We were able to get good people and keep them,” he said. In fact, several new hires are people who lived in town but had been working in coastal towns. “They were happy to be able to work here, and save the time and expense of commuting,” he said. “It seems to have solved our problem.”

Other managers reported fewer difficulties hiring for law enforcement. It hasn’t been a significant problem in many communities. Bangor has been relatively immune to any law enforcement officer shortage because it has “a very loyal workforce,” City Manager Ed Barrett said. “Most of our employees have been with the city a long time, and that makes it easier for us. We’re a little cushioned from an overheated labor market.”

Managers may still have to be creative in job searches, though. When Christina Therrien searched for a new police chief in Machias, she expected to have to hunt. “We have the county sheriff here, and State Police, and it’s not easy to find local applicants.” She figured that someone from away, perhaps from a larger city department “who was tired of getting shot at” might welcome the opportunity to move to a small Downeast town. As it happened, the new hire was from Texas, but had roots in a small town Maine.

Machias had a harder time attracting a superintendent for its wastewater treatment plant – a specialized job with a relatively small employee pool. “We advertised in the Boston Globe and the New York Times. That’s not something we usually do,” Therrien said. Finally, the town managed to convince a plant manager from Belfast to make the move, though Machias had to offer a higher salary and a housing allowance to clinch the deal.

In Fort Kent, Don Guimond said there is not always a good fit between what the town has budgeted and the amount it takes to hire good department heads. “We haven’t always been able to hire the candidate we wanted to,” he said. “You don’t like it when that happens, but that’s the reality.” Unlike most of the towns whose managers were interviewed, Fort Kent does not offer a retirement plan, which also affects job searches, he said.

Guimond said that hiring police officers hasn’t been a concern, though that isn’t as true for the dispatch center. Trying to run a 24-hour service offering relatively low pay has been difficult. As a result, the town council is now exploring contracting with the Aroostook County Sheriff’s Department or State Police for dispatching services. “Part of the reason is certainly the turnover we’ve had,” he said.

Professional positions have been the most difficult to fill for John Bubier, the long-time city manager in Bath, who recently moved to Biddeford to become manager there.

“There’s a sense that, when you’re hiring a finance director, that even though you need someone with the same qualifications as a CFO, you don’t necessarily need to pay a competitive wage. It’s hard to get an edge in hiring the people you really want,” Bubier said.

In Bath, the finance director position went unfilled for some time, and Bubier considers the city “very lucky” in finding a good candidate who came from an accounting firm and wanted to get away from the “seasonal madness” of income tax preparation. “From January to April 15 you don’t see your family,” Bubier said, and the new director “wanted something a little more predictable.” Ironically, when he moved to Biddeford, the finance director there had been a candidate for the Bath position, who’d had to turn down the earlier offer for personal reasons.

Bubier said public works departments also can face stiff competition from private sector employers. In both cities, he’s had “top notch people” trained as engineers as public works directors, but he also knows that such individuals “can easily get 20-30 percent more in the private sector.”

Biddeford is about to start a search for a new human resources director who covers both the municipal side, with 300 employees, and the school department, which has even more employees. “We need someone with a significant background in labor relations, employee training, and a knowledge of state and federal regulations. It’s a pretty complicated position, and we’re about to find out if what we’re offering is competitive,” Bubier said.

Competition for employees is definitely a factor in central Maine as well, said Cornell Knight, Winthrop’s town manager. The town recently lost two public works employees who took jobs as truck drivers for private firms. The town’s pay of $11.50 an hour was significantly less than the $14-$15 they were able to command with other employers, he said. “Now winter is coming on and we have to find someone who can operate a 30-ton plow truck under difficult conditions. It takes a cool head,” Knight said. “And you’re always unhappy about losing, good experienced people.”

Ed Barrett in Bangor said that public works drivers sometimes find trucking firms attractive even if wages aren’t such a big issue. “We ask our drivers to go out and unplug frozen storm drains in January. That’s part of the job, but you can see why some would rather just drive a truck and stay warm,” he said.

In Bar Harbor, Dana Reed, who’s been town manager for 19 years, says that the town has had good luck retaining its full-time, year-round employees. The concern for municipal employees, he said, is more the reverse of Raymond’s previous problem with residents who found higher-paying municipal jobs in other towns. In Bar Harbor, even long-time employees find it hard to keep up with skyrocketing real estate prices, and some of them have had to move off-island to find affordable housing.

Hiring shortages are more likely to appear in Bar Harbor’s seasonal work force, which includes police officers, parking attendants, and lifeguards. There’s so much competition for younger workers that it has been difficult to attract enough lifeguards, even though pay has increased. Parking enforcement is another concern, and one Bar Harbor has to pay a lot of attention to, given that parking is at a premium during the summer. “It’s a pretty rough job,” Reed said. “No one likes to see you coming down the street.”

While for the most part, municipalities don’t pay as well as the private sector for jobs where skills are easily transferable, the benefits packages most towns and cities offer are often superior to what employees can find elsewhere. But this traditional calling card for public employment has undergone changes, too, as retirement plans are revamped and the cost of health insurance soars.

MMA’s David Barrett said that most municipalities have headed away from the Maine State Retirement System plan, which was designed for long-term employment and has encountered significant financial difficulties with its unfunded liability. Some towns went in the direction of private sector plans that, with a booming stock market in the 1990s, seemed to promise greater financial benefits.

With the end of the bull market, though, and what Barrett called “less than stunning returns,” the more predictable benefit payments of traditional retirement plans have regained favor. Where employees have a choice, some are returning to defined benefit plans. “Public sector employers generally provide more funding for benefits,” Barrett said. “It’s still a plus.”

Towns and cities tend to offer a variety of options, particularly for retirement. Bangor left the Maine Retirement System altogether for new hires, and operates a 401A plan which provides a defined contribution from the city – up to 6 to 8 percent of earnings – matched by employees.

In Machias, the town uses the ICMA Retirement Corp. plan, and also contributes a percentage to retirement accounts. Bar Harbor also offers ICMA, but lets employees choose Maine State Retirement if they prefer. Raymond offers ICMA, and employees also qualify for Social Security. Winthrop, however, has stuck with the State Retirement System as its only plan.

Health insurance, while still quite generous by private sector standards, has emerged as a major concern for some managers, but is treated as more routine by others.

Bangor’s Ed Barrett said that rising premiums have put a real squeeze on the city budget. With its stable workforce, Bangor has employees enrolled in Anthem HMO and indemnity plans “that Anthem isn’t even offering for new enrollment anymore,” he said. The city has added a third, PPO plan with somewhat lower costs that it’s trying to convince employees is worth switching to.

Even though employees are affected by rising premiums, too, Bangor still bears the major expense, contributing 80 percent of the costs. Health insurance increases, energy costs, and cost of living raises collectively “would have put the budget up 15 percent,” against the state-mandated property tax cap of about 5 percent, Barrett said. Despite other adjustments, the city had to leave some positions vacant to meet the cap.

In Winthrop, though, Cornell Knight said health insurance does not rank high on his list of concerns – even though the town pays 100 percent of the cost for employees, and 70 percent for dependents.

If there’s a cloud on the horizon for municipal managers surveying hiring prospects for the future, it may lie in the public’s appreciation and respect for the employees whose salaries they pay for through taxes.

John Bubier has noticed what seems to be a certain skepticism about the job done by city employees that he thinks has developed over the last 10 years. “There’s a perception, by some at least, that public employees aren’t as hard-working and dedicated as they should be,” he said. Some of these attitudes seemed to be provoked by the Palesky tax cap referendum last year, which even though it failed by a big margin, still brought out plenty of criticism of municipal government, he said.

As to the work ethic he’s observed, Bubier said, “That certainly hasn’t been my experience in Maine municipal government. I work with some absolutely top-flight people who are not only good at their jobs, but incredibly dedicated. They work long hours, but are still ready to volunteer in the community.”

As to public support for keeping a dedicated workforce, he said, “I just hope the citizens get to see what I see every day.”