Government Industry Outlook: 3 Ways Technology Will Enable Mission

From tight staffing levels to the public’s expectations for digital experiences, government agencies are dealing with a lot. That’s why they’re embracing new technologies and approaches, such as AI for productivity improvements and skills-based talent management.

With more retirement cakes being cut by the day and long hiring processes to fill those vacancies, government leaders say the biggest risks to their industry are staff and labor shortages, a Workday-sponsored IDC survey found

Even though the public sector added more jobs in the first half of 2023 than throughout all of 2022, there’s a good reason for the industry to improve efficiency and hiring practices now: almost 30% of federal government employees will be eligible to retire within the next 5 years. 

At the same time, the public expects more from government agencies than ever before, including seamless digital experiences. To deliver better customer and employee experiences, and fulfill important missions, many government agencies will say goodbye to legacy IT systems and embrace maturing AI capabilities. 

“Public service organizations are recognizing some legacy systems are unable to meet the core mission. That’s a pretty clear sign that change is urgently needed,” says Ryan Gaetz, managing director, Accenture. 

Here are three big trends to watch for in government in the year ahead: service delivery, talent recruiting, and management and productivity. 

Governments Rethink Service Delivery, Customer Experiences with Targeted Tech Upgrades

When it comes to what people want from public service experiences, three things stand out above the rest: simplicity, humanity, and security, an Accenture study found. Unfortunately, the study also shows that accessing public services is often a frustrating experience.

One of the biggest, and most common, pain points? Having to provide the same information over and over again to various government agencies.

“To achieve 10x change in government, you can’t just put lipstick on a pig or pave cowpaths. It requires a lot of changes in processes and systems.”

Headshot of William Eggers William Eggers Executive Director Deloitte Center for Government Insights

In response, European Union governments are collaborating to implement the “once-only” principle: the idea that residents and companies should only have to provide standard information to agencies once, cutting down on headaches for the public and for short-staffed government agencies. Last year, representatives from more than 15 EU member states began meeting to conduct interoperability testing with the goal of creating a once-only technical system.

The projected time and money savings are massive—855,000 hours for EU citizens and $11 billion Euro for businesses annually, noted William Eggers, executive director, Deloitte Center for Government Insights, at Workday Rising in 2023. “This is an example of what we’re calling 10x government—radical improvements in government from cost savings to speed to efficiency to productivity,” he said.

The City of Akron emerges stronger with increased automation and security.


Such improvements often flow from a foundation of moderncloud-based IT systems that enable a unified data environment. With legacy systems and silos in the rearview mirror, inter-governmental data sharing and real-time data-driven decision-making can become business as usual.

Modern data infrastructure is also a prerequisite to harness the potential of generative AI to improve service delivery in government. Agencies with clean databases will lead the pack, able to train custom large language models (LLMs) that power generative AI tools. 

Imagine, as Deloitte does, AI tools helping to “lessen case workers” workload by prepopulating data from paper applications, automating system actions, sending reminders and other communications to clients, and recommending interventions.” Or service delivery becoming more equitable through chatbots offered in a variety of languages. 

“We all know that in the public sector, there’s an unlimited need for services and there’s always a finite amount of resources,” said William Riedell, city controller, City and County of Denver, Colorado, at Workday Rising in 2023. “You have to be creative and innovative.” 

AI and Automation Power Productivity Gains

In an era of prolonged budget and talent constraints, government organizations face more pressure than ever to increase productivity. In the U.S., the sector’s “productivity opportunity” is massive, according to McKinsey: about $750 billion split across federal, state, and local levels. 

Organizations are seizing significant operational efficiencies by deploying the right combination of tools and technology, Deloitte’s Eggers said. And AI and automation are very often in the mix.

Consider the U.S. Veterans Benefits Administration’s AI algorithm that helps sort, analyze, and import claim information. “There’s no more inputting of data,” Eggers said. The agency “has been able to reduce the time to sort and classify a claim from 10 days to about one day.”

Another example Eggers points out involves the Dallas Housing Authority. The organization leveraged AI, agile processes, and human-centered design practices to speed up inspection of new low-income housing units from 15 days to just 1 day. A more efficient process has attracted more landlords and added thousands more rental units to a high-demand housing market.

“By focusing on what an applicant can do—and not where they learned to do it—skills-based hiring will expand talent pools.”

Headshot of Kiran Ahuja Kiran Ahuja Director U.S. Office of Personnel Management

As AI matures, it will be integrated into an array of key public-sector functions to help work get done faster. Government procurement, for example, could be transformed by generative AI, helping officials screen proposals for compliance, verify accuracy through market data analysis, and identify certain submissions for further evaluation, according to Deloitte.

“To achieve 10x change in government, you can’t just put lipstick on a pig or pave cowpaths,” Eggers said. “It really requires a lot of changes in processes and systems. That’s what we’re seeing all over the world today.”

Skills-Based Talent Management Builds Momentum

Government leaders won’t solve their talent gaps by posting the same old job descriptions. To widen talent pools and close skills shortages, more organizations are pivoting to skills-based hiring approaches and training practices. 

City of Los Angeles uses Workday Financial Management and Talent Acquisition to Optimize People Management and Service Delivery


The momentum in the public sector is real. The federal government’s recent “National Cyber Workforce and Education Strategy” report advocates for skills-based hiring, upskilling, and reskilling. And 10 U.S. states have now adopted skills-based hiring practices. That includes Pennsylvania, which has eliminated a college degree requirement for 92% of state government jobs, opening up 65,000 jobs to non-college graduates, per Accenture.

“By focusing on what an applicant can do—and not where they learned to do it—skills-based hiring will expand talent pools by making it easier for applicants without a bachelor’s degree to demonstrate their skills and will help remove barriers to employment for historically underrepresented groups,” says Kiran Ahuja, director of the U.S. Office of Personnel Management.

But to truly understand what skills government agencies lack within their workforce, HR leaders need granular and timely data to inform in-house upskilling strategies. That’s one reason why more than two-thirds (71%) of CHROs say their organization is planning large investments in data solutions over the next 3 years, an Accenture survey found.

With a strong grip on skills-related data, forward-looking HR leaders will eye an array of emerging AI and machine learning (ML) use cases, including skills and performance management. Research from McKinsey shows that the skills-based approach is “five times more predictive of job performance than hiring for education.”

Work and workplaces will keep evolving in the years ahead—and so will talent management. The government reskilling revolution is on the near horizon, and it will arrive faster for organizations that work to unify data streams and thoughtfully deploy AI capabilities to build strategic value.

To learn more about how Workday helps governments drive digital transformation, visit our website.

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