Since the beginning of the year, the federal government has been reshaping its workforce, a process that has touched fleets across the country. By May 2025, 60,000 employees had already been affected, with more changes expected. 

Behind those figures are individuals with years of institutional knowledge and practical experience. For state and local governments, this moment offers an opening to bring in seasoned professionals whose skills can strengthen programs and services at the local fleet level.

To attract this pool of job seekers, fleets will need to rethink their total rewards packages to compete for talent. According to the U.S. Office of Personnel Management, federal government benefits are designed to help employees balance professional and family needs throughout an employee's career. 

As a result, federal employees value comprehensive, stable benefits and a generous retirement package compared to the private sector. 

Here are just a few employee benefits that stand out for federal employees.

• Student Loan Repayment: The Federal Student Loan Repayment Program (FSLRP) reimburses up to $60,000 of an employee’s loan, with a maximum of $10,000 per calendar year. While this benefit may not entirely cover an employee’s debt, it offers far more assistance than employees can access at the state or local level. The closest option will be the Public Service Student Loan Forgiveness Program, which still requires at least 10 years of payments to be eligible. 

• Paid Parental Leave: With the creation of the Federal Employee Paid Leave Act, parents receive up to 12 administrative workweeks of paid leave to be taken within a 12-month period following the birth or placement of a child. While some states match federal paid leave, others have yet to adopt a policy, only guaranteeing employees unpaid leave under the Family and Medical Leave Act.

• Healthcare Coverage:Federal employees have access to Federal Employee Health Benefits (FEHB), a program that offers hundreds of plans to fit employees’ unique needs. Not only do federal employees have access to healthcare coverage during their employment, but they are also able to maintain the level of their coverage after retirement. 

How State & Local Agencies Remain Competitive on Employee Benefits

Although there are many constraints on state and local budgets there is still an opportunity for state and local organizations to compete head-to-head to attract displaced federal workers with financial wellness benefits. 

In fact, Purchasing Power’s 2024 Public Sector survey found that only 41% of employees felt their employer cared about financial wellness benefits, and 66% felt their employer did not take an active role in helping with their financial wellness to better cover monthly expenses.

A total rewards program that addresses an employee’s holistic health, including financial, physical, and mental wellness can help address some of these gaps. These programs are available at little to no cost for employers while also being attractive for public sector job seekers. State and local employers should consider adding voluntary benefits that help employees stretch their salary and traditional insurance options even further.

When asked what they want out of a total rewards package, government employees indicated they would like access to low-interest installment loans (25%), bill payment programs (19%), medical deductible financing (18%), and an employee purchase program (17%), among others. 

The medical deductible financing benefit is important for fleet engineers and technicians in physically taxing roles. Although health insurance reduces costs, many public sector employees still struggle to pay the average $1,787 individual deductible, with 43% have under $1,000 in savings, according to a Purchasing Power survey. 

An employee savings benefit is a benefit rising in popularity that offers employees an alternative option to save money and access these funds in the event of an emergency. While this benefit is similar to individual savings accounts, it comes with tax advantages and the option for employers to contribute.

Purchasing Power’s survey found that employees desire greater financial support around their educational expenses and familial responsibilities. In fact, one in five people who did not have access to the FSLRP said that they would be interested in receiving the support. 

Further, only 18% said they have access to childcare or senior care assistance. If budget constraints prevent large-scale student loan repayment or paid leave, offering alternatives like online training or flexible schedules can still effectively support employees.

Replacing Size with Support

It is a season of change for thousands of former federal employees, and state and local agencies are vying for the influx of talent entering the market. To recruit and retain these employees, fleets will need to position themselves as an employer of choice, leveraging total rewards that support job seekers’ needs that are attractive and competitive.