Federal Retirement Tsunami?

Is there a retirement tsunami? A wave? A ripple? Does it matter?

Experts have been predicting a retirement wave for years, with former OPM DIrector Linda Springer even calling it a “retirement tsunami” in 2006. Springer said 60% of the General Schedule workforce and 90% of the Senior Executive Service would be eligble to retire in the next 10 years. The retirement tsunami was supposed to crest in 2008-2010. We are 7 years into the “Tsunami” and not much happened. We didn’t really see a retirement wave until the general aging of the workforce combined with sequestration, pay freezes and Fed-bashing to begin to push Federal employees out the door.

Federal News Radio’s Jack Moore did an excellent series of articles on the “Retirement Conundrum.” A key point I made when talking with Jack is the problem with making forecasts based upon today’s workforce. Almost every prognosticator makes the same mistake – they assume the workforce is static and everyone who is on board today will be x number of years down the road. Based on that, they say some percentage of the workforce will be eligble to retire in a few years and the sky will fall. Those assumptions forget to include normal turnover. The current workforce includes people who will retire, resign, be fired or die in the next several years. They will be replaced with people who are most likely not eligible to retire. If we really want to see big numbers, consider this – Every employee in every organization on the planet will leave at some point. The Federal government will have 100% turnover within the next 40 years or so. The real problem isn’t the fact of turnover. It is whether we know it is coming and are prepared to deal with it. Organizations that do good succession and workforce planning can anticipate turnover and be prepared well in advance to recruit and onboard new staff. In some cases, the turnover can result in cost savings or a better skilled employee. The key is planning. Without planning, even the smallest ripple can be disastrous.

Workforce planning is most effective when it is done on a large enough scale to enable the planner to draw actionable conclusions about a segment of the workforce. If it isn’t actionable, it is just an exercise. ICF International’s Dr. Christina Curnow and Dr. Brian Cronin have been doing research for clients where they look at entire segments of the workforce to identify industry workforce capacity to deliver the people with the competencies needed to do the work that needs to be done. Changing the supply in the labor market may require action on a much larger scale than agencies typically anticpate. For example, the U.S. Department of Homeland Security recently sponsored a workshop with over 40 representatives from the Federal government, international corporations, and academic institutions to discuss and define the demands within the cybersecurity workforce (Goodman, Lawrence-Pfleeger, Dodge, Longstaff, 2011). The final report underscored the fact the workforce demand will continue to exceed supply if coordinated action is not taken.

Human Capital? Human Resources? Personnel? Does it matter?

Why did I call this blog ChiefHRO.com (for Chief Human Resources Officer) rather than something that uses the term “Human Capital?” After all, I was the Chief Human Capital Officer for the Department of Homeland Security. So why not use it? Simple – I really dislike the term “human capital.”

The Oxford English Dictionary defines “capital” as “Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.”  “Resources” is defined as “a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively.”  Proponents of the “Human Capital” designation assert that Human Resources is an organization that provides services and “Human Capital” is strategic value of the people who do the work of the organization. They are not arguing against the people in organizations – in fact they are arguing that people are so critical to any organization’s success that they must be managed and treated as capital – the fundamental underpinning of any successful business. Unfortunately, I can not get past the “owned” part of the definition. Employees are not slaves or indentured servants – they are adults who choose to work for an organization. They are free to leave any time and often do. Your capital cannot decide to take a hike.

The evolution of names for people and organizations who do HR work (and for the work itself) always generates some controversy. Many years ago, they were Industrial Relations Offices. Then they became Personnel, the Human Resources, and then (at least in government) they became Human Capital. Even with all of the name changes, the basic work they did often was little changed. In fact, the name change were aspirational in many organizations. They wanted to be different and, more importantly, they wanted to be perceived differently. The sad fact is that changing your name doesn’t change what you do, who you are, or how you are perceived. I can change my name to Brad Pitt, but I don’t become a blonde, rich and famous movie star.

So is it really important to decide on a name for HR? I don’t think so. If you like Human Capital, by all means be a Human Capitalist. If you prefer HR, go for it. A few years ago, a friend who lead HR for an independent Federal agency changed her title to “Chief People Officer.” I think I like that one best of all, because it says in plain English what it is all about – People. Whatever you do, just recognize that organizations get nothing done without people, and people have minds and hearts and free will. Treat them badly and they can and will walk. Treat them with respect, give them opportunities to do good and interesting things, and they will make you successful. That’s what it (and this Blog) is all about.