A global study of government finance leaders has revealed shared priorities and challenges in an era of unpredictable geopolitics and rapid digital transformation.

The Future of the Finance Ministry study – published by Global Government Forum and sister title Global Government Finance – is based on interviews with 10 senior leaders from finance ministries around the world.

The interviews were led by John McCarthy, chief economist in Ireland’s Department of Finance, working with the editors of Global Government Forum and Global Government Finance. Microsoft is the knowledge partner for the report.

“In a world where ‘disorder is the new norm’, the traditional role of the finance ministry is undergoing a fundamental transformation,” McCarthy writes in the foreword.

Four key themes are identified in the report: the evolving role of the finance ministry in response to uncertainty; the shift to more flexible finance systems that support outcomes; digital transformation and the growth of artificial intelligence; and the battle for talent and trust.

This chapter extract (below) focuses on the battle for talent and trust.

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Recruiting talent fit for the future finance ministry

Governments are facing what has been described as a ‘war for talent’, driven by factors including tight public sector budgets, increased competition with the private sector, and shifts in working patterns since the pandemic.

Finance ministries are particularly exposed to these challenges as central departments and, at the same time, the type of skills they need is evolving.

In the face of their evolving role, finance leaders say the skills mix their departments need is changing. While financial and economic expertise remains desirable, interviewees consistently highlighted the need to combine these skills with digital literacy, data capability and an understanding of wider geopolitical and security risks.

One leader explained: “We are changing the profiles of our human resources [recruitment] right now. We are trying to incorporate [more] young people with data skills.”

However, building this capacity takes time, and many ministries are still working to clearly define their future skills needs and identify gaps.

“We really are going to have to build up that capacity… we spend probably too much time doing things we shouldn’t do, and not enough on [strategic work],” one interviewee said.

Among the countries that have done this strategic work, a need for “multi-skilled” staff has been identified – individuals that are able to move between technical analysis, policy advice, and cross-government coordination. As one put it: “I look for people with multiple skills.”

Some finance ministries have made progress on bolstering their skills mix, noting that five years ago there were “zero” data analysts in the department. Now there are “a lot more of them in our workforce”, one interviewee said.

However, finding the right balance can be a challenge.

“We’re getting some really good technical skills coming in, but a lot of our people have no finance skills, and so we’re having to train them,” one leader said.

Looking ahead, another interviewee noted: “It depends on how artificial intelligence develops: there might also be obstacles skills-wise.”

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Recruiting and retaining finance talent

As they focus on addressing their skills gaps, many finance ministries are finding it increasingly tough to recruit – and retain – the multi-skilled personnel they identify as necessary.

Many interviewees say higher salaries in the private sector are the primary battleground for skills.

“Our salaries are a bit lower than in the private sector,” one commented. “We compete with banks and investors, and yes, attracting young people here is very, very difficult,” said another, while a third added that “the salaries which we offer here will never be able to compete with what’s offered in the private sector”.

In some cases, salaries can be as much as 50 per cent higher in the private sector.

Some finance ministries have responded to this by implementing new pay scales to be able to compete for talent in senior digital and financial roles. However, not all governments are in the position to do so.

There are other contributing factors to retention pressures that ministries – and indeed governments as a whole – face. One leader said they have particularly high levels of turnover at the analyst level – a pressure exacerbated in some cases by large numbers of younger skilled workers moving abroad.

Added to this is the competition for talent within government itself. While some leaders report a positive trend that public service is being viewed as a “good thing” by the younger generation, this means that there is competition across the whole of government for tech- savvy and multi-skilled personnel.

As one leader highlighted, when finance ministries employ “smart graduates of quite diverse backgrounds”, these individuals typically move on rapidly. It is a well-worn tradition in civil services that once these staff members have spent a couple of years at the Treasury, they become “very, very attractive to other civil service employers”, which contributes to significant turnover.

To counter this, many finance ministries seek to leverage their unique position at the centre of government. One leader highlighted that the principal attraction of a finance ministry role is the opportunity to work at “the heart of everything that government does”.

Staff in the finance ministry get a level of “exposure to a broad range of global and national issues” that they simply “might not get elsewhere in other government departments”.

It was also highlighted that finance ministries have a wider systemic responsibility to ensure financial leadership across government.

Some explicitly highlighted concerns about the quality of financial leadership in line agencies, calling it “extremely mixed and sometimes incredibly weak”.

Managing their own skills while also contributing to systemic leadership is therefore a difficult balancing act.

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The issue of trust

The uncertainty and low growth discussed in this report can be seen as having contributed to the rise of populism in many countries, leading to a corresponding decrease in public trust in governments and civil services.

Some – though not all – finance leaders in this report flag public trust as an increasing challenge, which can also impact the ability to recruit and retain public servants.

As one noted, they face an environment of “profound mistrust of politicians and experts”, while another highlighted that political populism has meant that “it’s very popular to say that government officials… are stupid, that they are lazy”.

One even reported that civil servants in finance have faced physical threats following the implementation of unpopular policies.

Another leader added that public servants are “petrified of having their name in the paper” and that there “certainly seems to be a distrust of public officers”.

Finance leaders cannot address this alone – it will require a cross-government effort, and some finance ministries highlighted that they are developing outreach programmes to the public to explain the role of finance ministries.

“We always talk to experts, but we are trying to do a bit more pedagogy – talking to high schoolers about what we do, about public finances, about how the economy works.

“I think there’s a question of: how do finance ministries fit in a world [where] there’s a lot of distrust of experts [and] the level of financial and economic literacy is very low? So, we are thinking more about how we engage with the general public.”

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The future of the finance ministry: providing engaging work now and in the future

Finance ministries need to modernise their skills mix and working models to attract, retain, and support the people required to deliver effectively in an increasingly complex environment.

Despite the challenges, interviewees consistently emphasised that finance ministries remain central to the functioning of government, and that this centrality can be a powerful tool for attracting and retaining talent.

One leader described finance ministries as “highly respected organisations” and a “desirable place of employment”.

As technology frees up time, leaders see growing opportunities for staff to focus on higher-value analysis, long-term stewardship, and strategic advice.

Another leader highlighted that embracing technology such as AI can reinforce this appeal, by demonstrating that they are not “reliant on old ways of doing business”.

This leader sees technology as “fast tracking” the “hard yards” of data entry to allow staff more time for “alternative perspectives” and strategic thinking.

Interviewees also noted that work in finance ministries is becoming more engaging as they expand their scope to include complex, “non-traditional” policy areas.

This shift requires “reinventing the way we do things” such as offering staff more varied career paths and opportunities for growth, one said.

Even the finance ministry leader who was among the most concerned about the competition for talent acknowledged that the work of the ministry is “very interesting” and that they are implementing new pay scales to better “reward good performance”.

Writing in the afterword, Valentina Ion, public finance and social services global lead at Microsoft, said: ‘Innovation as a talent magnet: The skills challenge in the public sector is acute as complexity increases. This is not just about recruitment, but also about retention.

‘Offering modern, innovative digital tools is now a primary benefit for the current workforce; if a ministry relies on legacy systems, it will struggle to attract the data scientists and multiskilled professionals required to navigate the future.’

Interviewees for the study were: Lai Chung Han, permanent secretary, Ministry of Finance, Singapore; Carlos Guberman, secretary of the Treasury, Argentina; John Hogan, secretary general, Department of Finance, Ireland; Andrew Lai Chi-Wah, permanent secretary for financial services and the Treasury, Hong Kong; Struan Little, chief strategist, Treasury, New Zealand; Chidozie Ofoego, financial secretary, Government of Bermuda; Dorothée Rouzet, chief economist in France’s Treasury; Merike Saks, secretary general, Ministry of Finance, Estonia; Bas van den Dungen, secretary general, Ministry of Finance, The Netherlands; and Matt Yannopoulos, secretary, Department of Finance, Australia.