Despite wage increases, pay remains the top reason employees walk away—and data transparency may be the key to stopping it.

For years, public agencies have fought an uphill battle against turnover. From police departments and fire districts to city halls and school systems, leaders know the story well: hiring is slow, competition is fierce, and replacing experienced talent costs far more than retaining it.

But as wages rise across the country, many are asking a pressing question—if pay has gone up, why are employees still leaving?

According to the latest 2025 State and Local Government Workforce Survey from MissionSquare Research Institute and PSHRA, 40% of public employees cite compensation as their primary reason for exiting, while only 68% of HR leaders believe their pay structures are competitive. The disconnect is clear—and costly.

The Illusion of Progress: Why Rising Pay Isn’t Enough

Public sector leaders have made meaningful progress in increasing pay over the past few years. Inflation adjustments, cost-of-living increases, and one-time bonuses have helped agencies stay afloat. Yet these adjustments often fail to match market realities.

While employees see better opportunities in the private sector or neighboring agencies, HR and finance departments are often left guessing. How does our pay stack up regionally? Are we competitive by position or just by averages? What about total compensation—including benefits and incentives?

Without clear answers, agencies rely on outdated data, anecdotal benchmarks, or infrequent compensation studies that take months to complete. By the time the report lands, the market has already moved.

That lag in information breeds frustration for everyone involved. Employees believe they’re underpaid. Managers believe they’re fair. HR believes they’re doing their best. But without real-time data, no one can prove it.

The Cost of Uncertainty

Turnover doesn’t just disrupt workflows—it drains budgets and institutional knowledge.

Replacing a single employee can cost 1.5–2x their annual salary when factoring in recruiting, onboarding, and training. In labor-intensive agencies, that multiplies fast. For governments already spending 60% or more of their budgets on workforce, even small increases in turnover have ripple effects across operations and morale.

And it’s not just the financial burden. When seasoned employees leave, productivity dips, project timelines slow, and trust within teams weakens. Citizens notice. Departments fall behind. The perception of instability grows.

The underlying issue? Most agencies can’t show employees the why behind their pay. They can’t easily demonstrate competitiveness or equity, because they’re operating on static data in a dynamic labor market.

Confidence Gaps Between HR and Reality

The MissionSquare/PSHRA findings reveal another concerning trend: while nearly three-quarters of HR leaders express confidence in their benefits packages, only two-thirds feel the same about wages.

That confidence gap matters. Benefits—health insurance, pensions, and time off—remain strong retention tools in government. But employees are still looking first at the paycheck. In an era of wage transparency laws, online salary databases, and remote work options, public employees have never had more visibility into what their skills are worth.

When they see neighboring cities or counties offering even a few thousand dollars more for the same role, loyalty falters. Retention conversations quickly turn into exit interviews.

Why Benchmarking Matters

Benchmarking turns guesswork into clarity.

With real-time, verified market data, HR and finance teams can compare salaries, benefits, and special pay across agencies nationwide. Instead of relying on old studies or manual spreadsheets, leaders can instantly see where they stand and make adjustments backed by data—not assumptions.

At TrueComp, we’ve seen how agencies transform when they benchmark strategically:

• City of Berkeley reduced turnover risk by identifying key pay gaps in high-vacancy positions.
• Wayne County, North Carolina used benchmarking to modernize its compensation structure and strengthen workforce stability.
• City of Columbus leveraged data to demonstrate pay equity and attract top candidates faster.

The common thread is transparency. When HR and finance can visualize how their compensation compares, they gain the power to act quickly—before employees start searching elsewhere.

The New Era of Pay Transparency

Pay transparency isn’t coming; it’s already here. Across the U.S., new legislation requires public employers to disclose salary ranges in job postings, reinforcing accountability.

This shift has placed agencies under the same microscope as private companies, with one key difference: public employers can’t always raise pay on demand. They must justify changes to boards, councils, and taxpayers.

That’s where data changes the conversation. Benchmarking empowers leaders to say, “Here’s how our pay compares. Here’s what competitors are offering. Here’s what it costs to lose people—and what we gain by retaining them.”

In short, benchmarking gives HR and finance leaders the credibility and confidence to drive policy, not just react to it.

Bridging the Divide Between HR and Finance

The turnover challenge is not an HR issue alone—it’s a financial one. Compensation, budgeting, and workforce planning are interconnected.

Benchmarking brings these departments together with a shared view of the data. Instead of debating assumptions, teams collaborate around transparent insights:

• HR can prioritize recruitment and retention strategies based on verified pay gaps.
• Finance can project the budget impact of proposed pay adjustments in real time.
• Leadership can communicate clearly to governing bodies why investments in competitive pay matter.

This cross-departmental alignment doesn’t just prevent turnover—it builds trust internally and externally.

From Reactive to Proactive Workforce Planning

Most agencies only examine pay after a problem emerges—when vacancies rise or exit interviews pile up. But by that point, the cost of inaction is already steep.

Benchmarking flips the model. It allows leaders to identify potential retention risks early by tracking real-time market shifts. For instance:

• When private-sector salaries for IT specialists jump 8%, HR can see the trend immediately and propose adjustments before losing talent.
• When a nearby county increases its public safety pay scale, benchmarking alerts you to stay competitive.
• When leadership requests proof of equity, the data is already available—no need for a six-month study.

This agility helps agencies move from reacting to resignations to proactively protecting their workforce.

Retention Is a Data Problem—Not Just a Pay Problem

Compensation will always matter, but the real issue is the confidence gap between what leaders believe and what employees feel.

Benchmarking closes that gap. It brings fairness and clarity into focus, showing employees that pay decisions are based on facts, not favoritism. It enables HR to communicate value transparently and finance to justify budget decisions credibly.

In doing so, it rebuilds trust—the foundation of retention.

The Bottom Line

Turnover doesn’t have to be inevitable. With the right data, agencies can pinpoint where they’re falling behind, demonstrate competitiveness, and make strategic adjustments that save both money and morale.

Compensation will always drive career decisions. But in the public sector, data-driven transparency can drive retention instead.

Turn Data Into Retention

Benchmarking gives agencies the clarity and confidence to stay competitive, retain top talent, and prove the value of their compensation strategy.

Explore Benchmarking in action — and learn how data can turn turnover into opportunity.