Not surprisingly, the state of the economy will have the greatest impact on state and local governments in 2023. Economic struggles will impact budgets, which could limit how much hiring organizations can do to help alleviate the ongoing workforce shortages. Of course, the economy will also affect citizens and their ability to manage their financial obligations. Yet, the right technology investments might help overcome some of these challenges.

Economic Factors

Solving their workforce issues, which began during the pandemic, will continue to top the list of government priorities.

During the pandemic, governments slashed jobs. As of December, according to Labor Department data, the sector was still 944,000 jobs below its pre-pandemic level. Public sector organizations also haven’t been immune to the impact of the Great Resignation. More employees are leaving their current roles, with one-quarter of government employees who are leaving their jobs stating that they are considering leaving government work altogether.

The biggest impact will be felt as long-tenured employees continue to retire early – and take a host of institutional knowledge with them.

Simply hiring a bunch of new employees isn’t necessarily the answer, and it might not even be possible. Many state and local governments will be working with tighter budgets in 2023 in anticipation of an economic downturn.

The state of the economy is also affecting citizens, as increasing inflation rates are making it difficult for families to meet their financial obligations. According to a recent report, 32 percent of adults have paid a bill late in the last six months, with 61 percent claiming it’s because they don’t have the money on hand. In addition, 40 percent of adults are less able to afford their bills compared with one year ago.

Re-Thinking Collections

With their citizens struggling in the current economy, government organizations must re-evaluate their collection policies and practices. As the economic struggles continue, governments will face more political and public pressure, as well as media scrutiny, to implement more compassionate collection practices.

Government organizations must treat constituents with respect, and display empathy for their situation. When contacting citizens, representatives must try to understand constituent difficulties and compassionately guide them through all their payment options.

Part of this can be achieved through digital engagement. Government agencies that haven’t already done so should begin to incorporate self-service options, giving citizens the ability to schedule payments that best fit their needs. This must also include multiple online payment options, giving constituents the best chance to make their payments on time.

And government organizations must embrace digital communication as a viable and preferred way to interact with its citizens.

Welcome to Digital Courts

The digital shift happening within government organizations is also transforming courts. When the pandemic hit, courts were forced to conduct much of their business via online platforms, such as Zoom. Many courts have continued to embrace digital technology, conducting virtual bench trials and civil jury trials.

Many courts are also adopting online tools to turn constituents into “virtual clerks,” allowing citizens to schedule hearings and conduct other business online. Putting some of these tasks into the hands of citizens can help alleviate the workload facing court employees due to workforce shortages and allow them to focus on more critical tasks.

Some courts have even embraced the idea of “mobile courtrooms,” where courts go directly to citizens who cannot get to the physical court location. One example has seen judges and public defenders take their laptops and set up in pop-up canopies and vans in parking lots to serve homeless constituents.

New Regulatory Limits

Several new reforms have been introduced recently that limit the damage that can be imposed. Not surprisingly, these statutory limits on damages have faced numerous challenges, leading to a hodgepodge of rules across jurisdictions. The success of attempts to challenge damage caps has varied widely across jurisdictions, and the United States Supreme Court has yet to rule on the constitutionality of these provisions.

Better Than Anticipated

2023 brings with it a host of uncertainty in the government sector, mostly due to the economy. When you add in the workforce shortages and citizen struggles, it appears as if 2023 will be a difficult year. But, with some strategic technology investments to help streamline processes and improve citizen engagement, government organizations can help make 2023 a more positive year for everyone.

This is the third in a series of articles exploring trends in the healthcare, ARM, government, and payments industries. Keep your eye out for the final article.

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