In the world of public sector finance, a transformation is underway—albeit a quiet one. A digital evolution that promises streamlined operations, better reporting, cost-savings, and—ultimately—better serves the taxpayer. However, a major hurdle stands in the path of progress: the digital skills gap within public finance.
In this blog, we’ll explore the challenges and root causes of the digital skills gap and strategies to support staff in new skill development. It’s time to empower public sector finance professionals with the digital fluency and data literacy they need to steer agencies into an agile, data-driven future.
The Digital Deficit in Finance: A Stealthy Menace
Public sector finance departments are often waist-deep in work to achieve financial goals and allocate (often limited) resources. With rapid changes in technology, a wave of new digital expectations weighs on the public sector workforce.
The result is a quietly expanding gap in digital skills that slows an organization’s operational advancement and innovation. For public agencies, the digital skills gap manifests in a few ways:
- Traditional Technology: Legacy systems bog down financial processes with inefficiencies and make it hard to adapt to changing needs.
- Reliance on Manual Processes: Data entry and reporting by hand wastes time and resources, while increasing room for error.
- Inability to Leverage Data: A lack of process and skills around handling complex data analytics leaves departments blind to optimization opportunities.
- Stigma Surrounding Upskilling: Agencies that are apprehensive of adopting new technologies can risk devaluing continuous learning, blocking employees from learning relevant skillsets.
The Roots of the Digital Skills Dilemma
Many factors have contributed to the ever-widening gap in digital skills needed in today’s digital-first world. The public sector has trailed in the digital skills race—especially in finance functions—for far too long and needs to address the root challenges.
There is more pressure than ever for public agencies to digitize their operations. But, without the right support or funding in place, many are stuck treading water—and it’s the employees and the taxpayers that feel the consequences the hardest. Here are a few challenges agencies can explore internally:
Resistance to Digital Change
In our “Supporting Today’s Public Sector Workforce” eBook, we explore the two most common reasons many agencies use the same technology they adopted when the need for tech in the public sector was first identified:
- Cost and resource savings: Implementing the original systems was almost always incredibly time-consuming, costly, and complex. So now public sector managers and other public leaders are hesitant to go through that experience all over again.
- Change and risk aversion: These long-held systems are comfortable, familiar, and perceived as the safe option to continue serving the community. Many agencies don’t want to take on something new that their staff would have to learn all over again and the associated (perceived or real) risks.
Seismic Employment Shifts
Both public and private sector employers are facing large shifts in employee needs, values, and skills in the workplace. Employees are looking for more than just a paycheck and gravitate towards employers that offer defined career pathing and training opportunities. For example, we note in our workforce eBook, 76% of employees say they are more likely to stay with a company willing to offer continuous training.
Lack of Interest in a Digitally Lagging Company
When it comes to retention, younger employees have lower and lower tolerances for inefficiency and recognize the disservice to their own careers by staying with an employer that doesn’t leverage updated tech. It’s one contributing factor to turnover, leaving many long-tenured employees with no one to pass the torch to.
Laying the Foundations for Upskilling in Public Finance
The public workforce finance study from the National Association of State Treasurers found that the public finance sector only represents 25% of the total finance workforce, potential employees will naturally come across more private sector job openings. However, 48% of public finance sector roles only require 0-2 years of experience, compared to general finance roles asking for at least six.
By attracting and engaging with potential employees earlier on their careers, in addition to providing professional development opportunities, the public finance sector can lessen the skills gap and successfully upskill finance workforces with adequate digital competencies.
An effective way for agencies to begin closing the digital skills gap is by embracing new avenues for building those skills, such as:
- Microlearning: Accessible, bite-sized educational content fosters continual, easy knowledge expansion.
- Peer-Learning Networks: Platforms that empower casual dialogue and knowledge-sharing among colleagues reinforce the educational journey.
- Vendor Training Support: When choosing a vendor for finance and budgeting software in the public sector, ensure their training programs are thorough and accessible with available live support to help tailor skills to your agency’s needs.
- Simulation-Based Training: Virtual environments that replicate work scenarios allow for practical skill development without real-world risk—your software vendor should be able to provide a sandbox environment.
Looking to the Future: A Digitally Adept Public Finance Sphere
Modern, purpose-built finance and budgeting technology has many benefits when it comes to closing the digital skills gap. In this digital-first world, technology at work is expected to mirror consumer technology employees use in their daily lives. That expectation leads to new tools being far more user-friendly, streamlined, and easy to learn compared to traditional counterparts.
By leveraging the right technology and taking on these initiatives, the public finance workforce—not to mention the organization and the public they serve—will see the benefits, such as:
- Improved Operational Efficiency: Streamlined and flexible finance departments can process information faster, empowering rapid decision-making and responsiveness to fiscal demands.
- Enhanced Transparency and Accountability: By using modern digital tools for budgeting and financial management, everyone gets better visibility into the management of public funds.
- Support for Better Policy Creation: Improved data analytics skills allow public agencies to develop more informed and effective fiscal policies.
Supporting Today’s Public Sector Workforce
Transformation throughout the public sector is crucial to ensure that no one is left behind in the digital dark ages.
Take the first steps with us by reading our free ebook, “Supporting Today’s Public Sector Workforce” to learn about factors and influences on today’s public sector workforce and how agency leaders can lean into this new era of employee and community needs.
The time is now to close the digital skills gap and ignite a new era of public sector excellence.