The Agency Next Door Is Recruiting Your Best Employees. Do You Know It?

COMPENSATION STRATEGY
By Harold Westervelt, CEO | TrueComp | 5 min read

It started like most Friday afternoons. A city HR director got a call from a department manager: one of their best analysts had just given two weeks’ notice. She wasn’t leaving for a tech company or a startup. She was moving to the neighboring county for $12,000 more per year doing nearly identical work. The HR director’s first question wasn’t “how do we counter?” It was “how did we not know we were that far off market?”

The Competitor You Didn’t See Coming

The threat to your workforce isn’t coming from the private sector. It’s coming from:

• The county next door.
• The city down the freeway.
• The school district across town.
• The water district with a newly approved pay scale.

Other public entities understand your compensation structures, your budget cycles, and your constraints — and they’re using that knowledge to recruit your best people with targeted, competitive offers. They attend the same professional conferences. They read the same job boards. Their HR teams know exactly what positions are hard to fill and what it takes to attract someone away.

When they post an opening, your employees are paying attention. And in many cases, they’re applying — quietly, confidently, and without telling you until it’s too late.

When You Don’t Know, You Can’t Compete

Public agencies making compensation decisions without current, real-time market data are operating blind. You may be underpaying your top engineers, finance managers, or department heads by $10,000 to $20,000 — and the only way you’ll find out is when they hand in their notice. By then, you’ve already lost.

The problem isn’t always budget. Often, it’s intelligence. You can’t build a competitive compensation strategy around data that’s 18 months old. You can’t make a credible case to your board or city council without current benchmarks to anchor the conversation. And you can’t close a retention gap you don’t know exists.

The cost of replacing a single mid-level public sector employee is estimated at 1.5–2x their annual salary. For a $75,000 position, that’s up to $150,000 in recruitment, onboarding, training, and lost productivity.

The Hidden Costs Nobody Budgets For

The damage from poor compensation data rarely shows up on a single line item. It accumulates quietly — in ways that are easy to overlook until the pattern becomes undeniable. Do any of these scenarios look familiar? 

• A department head position sits vacant for four months while workloads pile up and service levels slip. 
• A top-performing analyst accepts a role at a neighboring district for a $14,000 raise — a raise your agency could have matched, if you had known. 
• A candidate rejects your offer because the salary was set without the current market context, wasting six weeks of recruitment effort and leaving a critical role unfilled even longer. 
• A long-tenured employee files an internal equity complaint after discovering a peer at a neighboring agency earns significantly more for the same work. 
• A compensation adjustment request is brought before the board — and denied — not because the budget wasn’t there, but because the request lacked the market data needed to justify it.

Each of these scenarios has a real cost. Together, they represent a structural vulnerability that data can fix.