Public sector entities across national, state and local levels are grappling with three interrelated challenges: cybersecurity, technological transformation and an aging workforce. We examine how public sector organizations can implement focused strategies to address these challenges in the year ahead.

1. Cybersecurity risk is on the rise.

Government entities make appealing targets for cybercriminals due to the vast amounts of confidential data they collect, as well as the potential to disrupt critical services. Cyberattacks against government agencies and public sector services were up 40% in the second quarter of 2023, highlighting the urgency for public sector organizations to enhance cybersecurity.

In addition to data breaches, ransomware attacks and operational disruption risks, public sector entities of all types must also protect against attacks from “hacktivists” and adversarial foreign governments. In 2021, a White House executive order directed governmental agencies to pursue the adoption of a zero-trust security model, which means users and devices are always verified — not trusted by default.

As cybercriminals develop constantly evolving and increasingly sophisticated attack methods, mitigating the risk can be complicated for public sector organizations that often use older, less secure technology platforms that aren’t fully integrated. The Cybersecurity and Infrastructure Agency (CISA) and the National Security Agency (NSA) monitor evolving threats and release recommendations to help organizations avoid top cybersecurity vulnerabilities.

Regular cybersecurity penetration tests are also beneficial for public sector organizations seeking to understand their cybersecurity gaps. Penetration testing simulates real-world attacks to identify vulnerabilities within a specific technology platform, such as an organization’s network, website, applications, software, security systems or physical assets. Typically conducted by an impartial IT firm, the tests help organizations strengthen defenses, improve incident response and safeguard sensitive data.

2. Technology transformation is critical.

The technology landscape is changing quickly, and many public sector entities are falling behind. Legacy platforms that aren’t effectively integrated create data silos that limit data insights, efficiencies and cybersecurity. Fifty-nine percent of government leaders say disconnected operational, financial and people-related data hampers their operations, output and decision-making ability.

A better-connected data landscape is also essential to help public sector entities tap into the power and potential of artificial intelligence (AI) tools. Today, only one in five government leaders report deploying technology that automates tasks and augments their workforce. This is significantly lower than the private sector, where one-third of leaders say their companies are reaping the benefits of advanced digital technology.

One case study example that’s unique to the public sector is the need to modernize the technology behind state and locally administered traditional pension plans, which remain the norm in the industry. Many of the 5,000 public sector pension plans in the U.S. aren’t fully optimizing the advantages of automation, with some still relying on manual processes and spreadsheets. Integrating the right tools can generate efficiencies and cost savings in the short term and accelerate innovation in the longer term.

Modern pension administration systems (PAS) bring a plan’s complete data together in a single, centralized pension database. A modernized PAS increases accuracy, expands reporting capabilities and enables convenient user access. Perhaps most importantly, an up-to-date pension administration system provides end-to-end data security that’s compliant with the Department of Labor’s cybersecurity guidance.

3. An aging workforce makes recruiting and retention top priorities.

The public sector workforce is older compared to the private sector, amplifying the impact of retiring Baby Boomers (born between 1946 and 1964) over the next several years. For example, only 8% of the federal government workforce is younger than 30, compared to 23% in the private sector.

With the youngest Baby Boomers set to turn 60 in 2024, public sector employers face an ongoing “silver tsunami” of retirements. While many public sector workers opt to work beyond age 65, the wave of Boomer retirements is especially problematic for public sector employers who have had challenges recruiting younger workers.

Attracting younger, tech-savvy employees can positively affect cybersecurity and technology initiatives. For public sector entities, it takes a focused recruiting strategy and, often, a shift in workplace culture. The ability to offer jobs that provide a strong sense of purpose is a plus when recruiting Millennial and Gen Z workers. However, public sector organizations must also offer the increased work flexibility, wellness support and career development opportunities that appeal to younger generations.

The public sector industry experts at CBIZ can help you optimize your organization’s strategies for 2024 and beyond. Connect with a member of our team and gain access to more resources here.

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