Why Can’t the Government Hire Young People?

Last week I wrote about the rapid decline in the number of Federal employees under age 30. The number of under-30 employees dropped from 233,759 to 176,533. The drop has been attributed to aging, a massive wave of resignations among younger employees, and hiring issues. OPM’s Fedscope database shows that, although resignations are up a bit (about 2,000 a year), the biggest problem is hiring.

One of the most successful hiring programs for recent college graduates was the Federal Career Intern Program (FCIP). It was a critical source for DHS and Customs and Border Protection when they needed to ramp up the number of Border Patrol Agents. CBP hired thousands of new Border Patrol Agents, including a high percentage of Veterans. While FCIP was a successful program from the hiring perspective, it had many critics, including most unions and the Merit Systems Protection Board (MSPB). MSPB ruled that FCIP violated Veteran Preference rights because it lacked adequate “public notice” to allow Veterans to apply for jobs filled via FCIP.

OPM replaced the FCIP with the Pathways programs. Pathways includes an internship program for current students, a program for hiring recent (within 2 years) graduates, and the Presidential Management Fellows Program. The Partnership for Public Service reports that Chief Human Capital Officers have expressed dissatisfaction with Pathways. FCIP used an Excepted Service appointing authority called Schedule B. The Pathways recent graduate program uses Schedule D. I decided to take a look at hiring for permanent positions using Excepted Service Schedules B and D to see how Pathways is doing relative to the FCIP. Fedscope does not provide a breakdown of specific Schedule B appointment types, but the majority of them traditionally were for FCIP.

What I found was not encouraging. The FCIP was terminated in February 2011. Hiring of under-30 applicants dropped by 58% between 2010 and 2011. When Pathways was introduced in 2012, total hiring continued to drop. We cannot show direct causation between problems with Pathways and decreased hiring, but the curve definitely moved in the wrong direction in 2011 and fell off a cliff in succeeding years. Last year the government hired less than one tenth the number of employees it hired in these programs just five years ago.

Federal Schedule B & D Hires 2009 - Q1 2014

The drop in under-30 hiring presents many long-term problems for the government. If it is not corrected, it will send the message that the Federal government is not a welcoming environment for young people, create a “missing generation” in the work force, and exacerbate inter-generational issues. It may also reduce opportunities for 18 – 24 year old Veterans, who have an unemployment rate over 20%.  None of those are good outcomes.

The government cannot return to FCIP because of its legal deficiencies, and it cannot rely on Pathways as it is now being implemented. OPM and the CHCO Council should commission an independent review of this issue by a third party (such as the National Academy of Public Administration) to identify the causes of the lack of hiring under-30 applicants and to recommend public policy changes that can ensure the government meets its intake needs in a way that does not  disadvantage young people and create other long-term issues.



What Happened to All of the Young Federal Employees?

In 2009 there were 233,759 Federal employees under age 30 – now there are 176,533. In 2009 there were 224,775 employees age 60 and over. Now there are more than 268,000 and the number is growing. What happened? Why is the workforce getting older? Should we even care? After all, older employees are often more experienced, more stable in their careers, and likely to continue to working for a number of years.

The problem the government is facing is that the number of younger employees is a good indicator of the talent the government will have available for critical mid-career jobs in the next 15 – 20 years. The lack of 30 and under talent means we will be facing significant shortfalls as current mid-career and older employees retire. We have seen this problem before. During the Clinton administration, employees in human resources, procurement and other “control” jobs were significantly downsized. Every Chief Human Capital Officer and Chief Procurement Officer I have talked with says they are still paying the price for those cuts. When GS-14 and GS-15 jobs are advertised, the number of high quality candidates is often inadequate. These are jobs where we used to see large numbers of excellent applications. Now a handful of good candidates is considered to be a good result.

The current workforce demographics are shifting rapidly. When we look at Federal employment by age group, we see the number of under-30 employees is dropping precipitously (from 11.4% of the workforce to 8.5%) and the number of 60+ employees is growing (from 11.0% to 13%). The rapid shift of the workforce profile is significant and a bit shocking. While some of the change can obviously be attributed to employees aging out of the 29 and under and 30 – 59 categories, that doesn’t explain everything. Why are things changing so quickly? Are younger employees leaving faster than older ones? Is the government hiring fewer young employees?

Fed Employment trend - Agencies by age group

Turnover is Not the Problem

Some of these questions are easy to answer. Publicly available data show the number of people leaving government and the numbers who are hired. What we see is interesting – the raw number of young people leaving peaked in FY 2010 at 69,656, and dropped to only 46,319 in FY 2013. The number of mid-career (age 30 – 59) employees and the number of older employees leaving have increased. A higher turnover rate among younger employees is to be expected. Early in a career, more employees change jobs than they do later in their careers. In almost every occupation and in most employers, turnover is highest in the first two years of employment. The number of permanent employees under 30 who are quitting is up by about 2000 per year, but that is a small fraction of the drop in employment in that age group. What these numbers tell me is that we do not have the extreme problems with retention of younger workers that some argue we have. Quit rates are up, but overall losses of under-30 employees are down, not up.

Federal Departures from Civil Service by Broad Age Groups

Hiring is the Problem

Where we do see a clear problem is in hiring younger workers. Overall hiring is down across the board, but hires of young people have dropped far more than those of mid-career and older workers. The number of new hires under age 30 has dropped by 54.8% since FY 2009, while mid-career hiring has dropped 37.2% and age 60+ hiring has dropped 24.4%. It is clear that what is driving the number of younger employees down is not turnover – it is hiring. The intake of younger employees has dropped so much that, even though younger employees are actually quitting less than they did 5 years ago, the new hires are not keeping up.

Fed New Hires by Age Group 2009 Q1 2014

What is causing the hiring of young people to dry up? Three reasons stand out:

  • First is younger applicants’ lack of interest in Federal careers. In recent years we have seen pay freezes, a partial government shutdown and almost non-stop Fed-bashing by the press and members of Congress. Someone just starting a career is far less likely to choose an employer where they have difficulty getting pay raises, are vilified by the press and senior government officials, and run the risk of having their income cut off suddenly because of political fights in Congress.
  • Second is agencies hiring filling fewer entry level jobs because of budget cuts. An agency that can fill only a small percentage of its vacancies may elect to fill them with more experienced new employees who can be productive immediately. Until budgets stabilize, this problem is likely to persist.
  • Third is the lack of effective programs for hiring recent graduates. Two of the hiring programs that target such applicants are the Pathways and Presidential Management Fellows programs. A recent report by Jason Miller of Federal News Radio said neither program is meeting agency needs today. The Partnership for Public Service 2014 Chief Human Capital Officers survey showed agencies are not satisfied with the Pathways program and 47% are not using it in a meaningful way. Some argue the program’s public notice requirement are too onerous, while others say agencies simply have not adjusted to the program since it was deployed in 2012. Whatever the reason, there does not appear to be a clear “Pathway” to Federal service for recent graduates. That says nothing about the continuing challenges applicants of all ages face in navigating the overly complex and slow Federal hiring process.

The shift of the Federal workforce to one that is much older is likely to reignite talk of a pending retirement wave. Although previous predictions of retirement doom proved to be unfounded, they were based upon projections of a workforce that had hiring and turnover numbers closer to historical norms. This rapid demographic shift is unlike what we have seen in the past and it is safe to say no one knows when current employees will retire. Societal trends are moving in the direction of longer careers, both for lifestyle and economic reasons. That may mean the workforce will continue to increasingly be populated with older workers. If that continues, we are likely to see a retirement bubble at some point in the future. If the government develops a reputation as a workplace that is not hospitable to recruiting younger applicants, we will likely see the trend accelerating for a few years until something is done to proactively deal with it. Until that happens, we should expect to see these trends continue.

Federal agencies will face a number of challenges as the workforce profile becomes more titled toward older workers. In my next post I am going to address the consequences of these demographic shifts and what I believe the government must do to adapt.