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Retirements surge, new hires plummet

Oct. 15, 2012 - 08:53AM   |  
By STEPHEN LOSEY   |   Comments
The federal government's long-awaited retirement wave is here, and it's smacking headlong into the biggest hiring slowdown in a decade.
The federal government’s long-awaited retirement wave is here, and it’s smacking headlong into the biggest hiring slowdown in a decade. ()

The federal government’s long-awaited retirement wave is here, and it’s smacking headlong into the biggest hiring slowdown in a decade.

And it’s not just retirements. Overall attrition shot up in 2011, which caused the government’s total workforce to drop by its greatest amount since the height of the government downsizing in 1999.

With no end to tight budgets in sight — and with even steeper sequestration cuts possibly on the horizon — employees worry things could break down even further.

One federal employee — an accountant who asked for his name and employing agency not to be published — agreed that the loss of institutional knowledge is becoming a significant problem with the retirement wave.

“It’s the things that make the office run smoothly” that are being lost, the accountant said. “The people that understand why things are done, the people they need to speak to to get things done, things that worked or didn’t work in the past, how we accomplished things in the past that people coming in wouldn’t understand.”

The accountant also said that his bosses are afraid to fill vacant positions, even though the vacancies are critical, because they don’t know if they’ll have the budget for them in the future. As a result, employees in his office have taken on additional duties, which he fears will make them disgruntled and spur them to leave.

“I think that between people retiring who have institutional knowledge, and reluctance to hire due to budget cuts themselves, agencies are going to find themselves critically shorthanded,” the accountant said.

Other federal employees said they’re seeing the same thing.

Phyllis Slayton, a command and evaluation officer at a Navy hospital that she asked not be identified, fears that if her colleagues keep having departed employees’ work dumped on them, some will get fed up and quit themselves, creating a cycle of more work and more departures.

“It’s a domino effect,” Slayton said. “People are frustrated, and the morale issue is very much affected.”

Former Office of Personnel Management executive Henry Romero hopes it doesn’t come to that, but he said the current staffing challenges will put agencies’ succession plans to the test.

One thing is certain, Romero said: The long-delayed retirement wave is here. For years, experts have predicted large numbers of baby boomers would retire and take years of experience and institutional knowledge with them. But until recently, that wave never seemed to arrive.

Romero said that delay was likely because the 2008 economic crash decimated Thrift Savings Plan accounts, eliminated private-sector jobs that might have provided second careers, and likely forced some feds to keep working because their family members lost their jobs.

But retirement nest eggs have had a few years to recuperate, and the time of mass retirements has come.

Retirements for all of 2011 were up 24 percent over 2010 levels, according to OPM statistics. And in the first nine months of 2012, OPM recorded another nearly 8 percent increase. Meanwhile, new hires in the first quarter of 2012 plunged 32 percent over the same period in 2010.

Romero said it’s not just the recovering economy and TSP that are prompting more retirements — it is also the current pay scale freeze, due to continue at least through March. Because of the pay freeze, many feds will not see increases in their high-three salary averages, upon which their pensions are based.

Moreover, lawmakers and deficit reduction commissions in recent years have floated several cuts to federal pension benefits, such as switching from a high-three to a high-five system. Vocal fed-bashing from politicians has wearied many civil servants. And some feds may feel looming budget cuts will hamper their ability to do their jobs properly and decide it’s time to leave.

Many cash-strapped agencies have offered buyouts and early retirements over the last two years to reduce their payrolls and avoid furloughs or layoffs.

Shrinking staffs have led, in some cases, to backlogs or losses in productivity. The Social Security Administration, for example, lost 6 percent of its staff last year and has repeatedly warned Congress that it cannot keep up with swelling workloads as baby boomers retire and more Americans file for benefits.

SSA has repeatedly cut hours at its field offices and leaned more heavily on overtime as its workforce has declined. And SSA Commissioner Michael Astrue earlier this year told Congress that his agency’s progress at cutting down a massive case backlog has slowed as its workforce dropped.

The IRS also saw a 6 percent staffing cut last year. The National Treasury Employees Union, which represents IRS employees, said fewer tax enforcement agents translates to $4 billion a year in uncollected revenues.

Romero said that all the talk about the retirement wave may have been the wake-up call some agencies needed to seriously work on their succession plans.

“They should have a pipeline ready to have people in place to take over jobs when key members of the organizations leave — especially if many people leave at the same time,” Romero said.

This becomes especially important when agencies have either frozen or significantly reduced hiring. And the government — especially at agencies such as the Defense, Justice, Labor and Treasury departments — significantly scaled back hiring last year.

But even if agencies can bump up a junior employee to replace a departed manager without hiring, Romero said, that still leaves a gap where the newly promoted employee once was.

And employees say those gaps have ripple effects that can undermine an entire office.

Slayton said she’s seen roughly a dozen employees in her area retire over the last 18 months, where only three or so would have retired in the past.

Hiring at her hospital hasn’t entirely been frozen, but she said several of those positions remain unfilled. As a result, she said, “everybody gets more and more work to do.”

“They won’t fill jobs, and that really puts a load on a lot of people,” Slayton said. “They’ve [already] got full-time, busy jobs, and they have to take on more and more. And you can’t say no. You have no option.”

And when employees do step up and assume more duties because of a shrinking staff, they often do not get recognized.

“You don’t get promotions, and you’re not making any more money for taking on this work,” Slayton said.

Martin Baumgaertner, chief administrative judge for the Merit Systems Protection Board’s Central Regional Office in Chicago, said some MSPB offices around the country haven’t been able to replace departed judges and have had to get clever to keep up with the workload.

Baumgaertner said that because MSPB’s Dallas office is short-staffed, the Denver and San Francisco offices have taken on some cases that would normally be assigned to Dallas.

“Agency heads ... have to be prudent in the way they apportion money,” Baumgaertner said. “We all understand that, and we appreciate the pressures that our senior leaders are under. But it falls to those who remain to make sure they can maintain the culture of timeliness, to get cases out and find ways to ensure we are keeping up with the law and still being fair to the parties.”

The combination of trends — increased retirements and reduced hiring — creates a mentoring and training gap, Baumgaertner said. Retiring employees take years of institutional knowledge with them when they leave.

When hiring is suppressed, there often is not the overlap one wants to see between when a new employee is hired and when an older employee leaves so that knowledge can be passed on, he said.

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