In January, the Federal Reserve reported that regional economies nationwide are rebounding. The pace may be uneven, but the uptick is a welcome change for state and local government agencies that have seen their budgets battered over the past few years.

The Fed report also noted that the technology sector posted some of the strongest growth in many parts of the country, driving up pay for specialized IT skills. And while no one would argue that the improving economy is anything but good news, it does rekindle a long-standing problem for many public-sector IT departments: attracting and retaining skilled employees.

Before the recession hit, government IT agencies often functioned as training grounds for young technology workers, honing their skills for a few years only to see them snapped up by private companies offering salaries and perks that government couldn’t match.

Last year, we saw plenty of evidence that the problem is coming back. Multiple states and localities told us that workforce issues were now some of their most pressing priorities. For instance, the CIO of a large city school district said his agency had 13 open positions because it couldn’t recruit the right people. Another CIO for a large metropolitan government said at least 10 IT jobs were sitting empty for the same reason.

The severity of the issue depends on the strength of the local economy. But in a growing number of communities, there is once again fierce competition for IT employees with the right mix of skills. And, once again, lots of agencies will struggle to compete. Many are saddled with unrealistic salary ranges, arcane civil service rules, old technologies and restrictive work policies — hardly the first choice for skilled workers who are being courted by private industry.

Some states and localities have addressed the problem. Delaware removed workers in its Department of Technology and Information from the civil service system in 2003, giving the state more hiring flexibility. Utah’s statewide IT consolidation initiative in 2005 included transferring employees to at-will status and increasing salaries.

Others are looking into it. Last year, a task force assembled by New York City Mayor Michael Bloomberg called for numerous changes to the state’s 127-year-old civil service system, including reducing the importance of civil service exams in hiring city workers. Among other things, the task force called the exams impractical for measuring the skills of IT workers, according to The New York Times.

This year, more states and localities will need to assess whether they’re competitive for IT talent as the market heats up.

Steve Towns, Editor Steve Towns  |  Editor

Steve Towns is editor of Government Technology, and executive editor for e.Republic Inc., publisher of GOVERNING, Government TechnologyPublic CIO and Emergency Management magazines. He has more than 20 years of writing and editing experience at newspapers and magazines, including more than 15 years of covering technology in the state and local government market.