Talent Management Findings from the 2023 Deltek Clarity Government Contracting Industry Study

As a government contractor, you understand the importance of navigating the ever-changing waters of a constantly evolving industry. From shifts in compliance regulations to government budget fluctuations, it’s critical to gauge market trends and sentiment to keep up with your competition. And because of the unique nature of the government contracting vertical, it’s not enough to follow generic, industry-agnostic trends. This is where access to detailed benchmarking data from companies within your industry becomes invaluable, allowing you to truly measure your firm’s efficacy compared to your peers.

With 14 years of providing timely insights that GovCon firms consistently rely on, The 2023 Deltek Clarity Government Contracting Industry Report delivers insights into the KPIs, challenges, opportunities and more that businesses in your industry are focused on today. This year’s report includes findings from 714 participating firms, with respondents spanning across the United States and identifying as working within Federal and/or State, Local and Education (SLED) markets. These survey findings are segmented across multiple functional business areas, such as Business Development, Project Management, Technology Trends, and of course – Human Capital Management. With an eye toward how firms have approached acquisition, retention and engagement in the last fiscal year, Deltek’s Clarity report valuably dives into how government contractors are facing the challenges and opportunities of managing their most important asset – their people.

Government Contracting HCM Trends

The overall performance and outlook for government contractors was positive during the 2022 fiscal year, however challenges were felt meeting candidate expectations and retaining skilled talent. With overall staff decreases of 3.4%, mainly from voluntary departures, survey respondents flagged retention as their number one challenge this year, a shift from last year’s focus on attraction. As government contractors hone in on retention, career development programs (such as coaching, mentorships, and learning programs) were identified as the top retention strategy amongst respondents, with other initiatives like offering hybrid opportunities and increased Human Capital Management (HCM) solution investments also being mentioned.

Even with retention being top of mind for HR professionals, acquisition is still of critical focus for government contractors looking to obtain specific skill and competency requirements that may not be able to be developed through internal upskilling and reskilling efforts alone. When it comes to challenges acquiring net new talent, this year's respondents cited both attracting qualified talent, as well as being able to offer competitive compensation as their biggest hurdles (with both answers tying for the #1 spot) – illustrating the power jobseekers continue to wield throughout hiring conversations.

Whether considering the attraction or retention of talent, work-life balance and workplace flexibility were in the spotlight for government contractors within this year’s report. As an example, this year’s survey saw respondents flag a lack of remote work flexibility and concerns over work-life balance as being top reasons why candidates turned down offers. There are of course many actions employers can take to meet employee expectations of balance and flexibility, including providing remote or hybrid opportunities (which 40% of respondents are offering today). In fact, 80% of top GovCon performers within this year’s survey (which is identified as being within the top 10% of companies with the highest retention rates) offer their employees hybrid opportunities – going to show the success likely seen with this sort of working model.

And finally, something that was of keen interest within both industry reports were initiatives surrounding Diversity, Equity, and Inclusion (DEI). We know the importance of DEI initiatives to meet various compliance regulations, but additionally these programs help to expand consideration to candidates and talent pools that might inadvertently be overlooked, and make space for all voices to be heard, recognized, and amplified. However even with all these benefits, only 30% of respondents said they have DEI programs in place. Many are challenged with how to get these initiatives off the ground and keep them going -- citing issues measuring and budgeting for their initiatives, as well as simply intaking employee perspectives.

While there is no one size fits all approach to measuring DEI in your organization, looking at metrics such as job satisfaction, pay equity and retention figures, and breaking them down along targeted lines where possible, is one way to track and tabulate efforts within your organization.

As the landscape for both government contracting firms and HR professionals continues to shift, the need to meet and exceed previously held expectations is apparent. Whether you’re looking to win your firm’s next major contract or land your next great hire, it’s critical that you measure your organization at every turn – both internally and externally – to stay ahead of the curve. Find out more about your peers’ top priorities and the state of the GovCon industry by downloading the full Clarity Report.