In late May, NEOGOV which provides integrated HR, payroll, talent management and policy and compliance management solutions for the public sector, published a report, “The Top 5 Public Sector HR Trends of 2026.”

According to the report, which was based on a survey of more than 4,200 public sector professionals across city, county and state government, “a combination of conditions, decisions and constraints is altering the public sector HR landscape in 2026.”

These elements drive change at all levels of HR operations. As the report explains “Teams are operating with staffing shortfalls, an obstacle compounded by long hiring timelines and low budgets. Managers are juggling competing demands, often with higher expectations in the same constrained environment. 

“At the leadership level, long-term priorities are overtaken by more immediate operational needs, each adding to the unfading sense of urgency. For years, these felt like temporary disruptions. But in 2026, they have become a steady state of function for public sector agencies – something many teams now plan around rather than expect to resolve.”

For example, according to the report:

• 63% of agencies are experiencing staffing shortages

• 35% report that more than 10% of budgeted positions are currently unfilled

• 58% struggle to find qualified candidates

• 52% cite offering competitive salaries

• 48% point to slow hiring processes or time-to-hire

One of the report’s key findings is about AI. Based on NEOGOV research, “while agencies are beginning to adopt AI tools, there are gaps in how this use is systematized, governed and ultimately scaled. Some of the data points the survey points to are:

• 21% of agencies report actively using AI today

• The most common use cases are data analysis (46%), internal communications (42%), and workflow automation (33%)

• Adoption is currently highest among HR leadership and executive roles, suggesting experimentation is being driven top-down

  
  

Although there’s growth in the use of AI:

• Only 28% of agencies have formal AI policies in place

• Just 24% have provided AI training to employees

• Only 24% say they are very prepared to manage organizational change

NEOGOV also came up with some important data related to retention, including the following: 

• 52% cited higher pay as the leading reason employees leave

• 46% pointed to retirement

• 26% cited career change

#StateandLocalGovernmentHumanResources #StateandLocalGovernmentHR #NEOGOVreport #StateandLocalGovernmentManagement #StateandLocalManagement #StateandLocalGovernmentPerformance #StateandLocalArtificialIntelligence #StateandLocalAI #StateandLocalArtificialIntelligenceAndHumanResources #StateandLocalGovernmentGenerativeAIPolicyandManagement #CityGovernmentHumanResourceManagement #CountyGovernmentHumanResourceManagement #StateandLocalGovernmentHiring #StateandLocalHiring #StateandLocalRetention #StateandLocalWorkforceManagement #CityHiring #CountyHiring #CityandCountyEmployeeRetention #CityandCountyEmployeeTurnover #StateandLocalEmployeeTurnover #StateandLocalArtificialIntelligenceGovernmance #StateandLocalArtificialIntelligenceTraning #StateandLocalManagementNews #StateandLocalHumanResourcesNews #BarrettandGreeneInc