Shutdown Redux: (Borrowed) Money to Burn

MoneyBurningEvery time I think of the potential for a shutdown, some famous words from President Ronald Reagan come to mind. “There you go again….”

A lot has been written about the 2013 shutdown. How it disrupted government services. How it wasted $24,000,000,000 dollars and taxpayers got nothing in return. How Federal employees were sent home to do nothing, not knowing if they would be paid. How in the end they got paid for doing nothing. How much stress employees, customers, and taxpayers endured. How contractors had to lay off staff during the shutdown (most of whom got no back pay).

I almost expect to see Rod Serling step into the picture and start explaining how nothing is what it seems in the Twilight Zone of Washington, DC. Sadly, there is no narrator and this is not a TV show. Shutdown planning has already started in every agency. Leaders are reviewing plans, updating the lists of exempt positions, and working with other agencies who may be affected if they shut down.

All of this planning costs money. There is a dollar cost and an opportunity cost. Time that is wasted on planning for another shutdown is never going to be recovered, yet no responsible agency can fail to plan for the consequences. They have the choice of being wasteful or irresponsible.

Pain for Everyone

Just like last time, government employees are not the only ones who can and will suffer in another shutdown. In fact, because government workers will most likely be paid for any time they do not work, they may be among the least harmed by a shutdown. Employees in the private sector are subject to far more losses. Here are a couple of examples:

Federal Contractors. Businesses have to earn revenue to pay employees. If they are told to stop work, the company’s revenue for that contract stops. Larger firms can absorb the impact for a few days, but not much longer. Small firms may not be able to absorb anything. If they lose the revenue, they have to immediately lay off employees. The government does not make the contractor whole after the shutdown and the employer does not make the employee whole. Everyone suffers and no one wins.

Businesses Other than Contractors. Walk into a restaurant near Federal offices or military installations and take look at the number of Federal employees who are there. Go to the dry cleaners, the convenience stores, and the coffee shops. They depend heavily on customers who work for the Federal government, either as employees or contractors. When they are not at work, those businesses send employees home. They get no revenue and their employees get no pay. No one makes any of them whole.

The economic impact of a shutdown is immense. It is even more than the dollars wasted on paying employees ($2.5 billion in the 2013 shutdown) who are not allowed to come to work, the revenue businesses lose, and the wages their employees will not get paid. Here are just a few more examples from the 2013 shutdown:

  • It halted permitting and environmental and other reviews, delaying job-creating transportation and energy projects. For example, the Bureau of Land Management (BLM) was unable to process about 200 Applications for Permit to Drill, delaying energy development on Federal lands in North Dako- ta, Wyoming, Utah, and other states.
  • It hindered trade by putting import and export licenses and applications on hold. For example, because the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau was unable to issue export certificates for beer, wine, and distilled spirits, more than two million liters of U.S. products were left sitting at ports unable to ship.
  • It disrupted private-sector lending to individuals and small businesses. During the shutdown, banks and other lenders could not access government income and Social Security Number verification services. Two weeks into the shutdown, the Internal Revenue Service (IRS) had an inventory of 1.2 million verification requests that could not be processed, potentially delaying approv- al of mortgages and other loans.
  • It halted Federal loans to small businesses, homeowners, and housing and healthcare facility developers. The Small Business Administration (SBA) was unable to process about 700 applications for $140 million in small business loans, and the Federal Housing Administration (FHA) was unable to process over 500 applications for loans to develop, rehabilitate, or refinance around 80,000 multifamily rental units.
  • It delayed the Alaskan crab fishing season, costing fisherman thousands of dollars in lost revenue. Because the National Oceanic and Atmospheric Administration (NOAA) was unable to apportion harvest levels, the start of the season was delayed for three to four days. The fishing industry estimates these delays cost fisherman thousands of dollars of lost revenue per day, since days lost at the beginning of the season cannot be made up later.
  • It disrupted tourism and travel by closing national parks and the Smithsonian. The National Park Service (NPS) estimates that the shutdown led to over $500 million in lost visitor spending nationwide, a significant economic hit to communities surrounding national parks and monuments.
  • It significantly impacted small businesses that contract with the Federal government. Compared with the same period last year, small business contracts with the Department of Defense (DOD) dropped by almost one-third during the shutdown, and spending dropped 40 percent.
  • It delayed aircraft purchases and deliveries by closing the Federal Aviation Administration (FAA)’s Aircraft Registry. The General Aviation Manufacturers Association estimates that this delayed 156 aircraft deliveries valued at $1.9 billion.
  • It temporarily closed six Head Start grantees, serving nearly 6,300 children. Head start grantees operating in Alabama, Connecticut, Florida, Georgia, Mississippi, and South Carolina closed for up to nine days before reopening with funds provided by philanthropists through the National Head Start Association or their state.

So – in addition to burning the government’s borrowed money, a shutdown will harm businesses large and small, take money out of the pockets of working men and women, reduce tax revenues, disrupt communities, and generally make a mess.

Do You Have to Lie to Get a Federal Job?

LiarsAt last week’s Government Workforce Conference, a Department of Commerce official made some news by saying “If you apply for USAJobs and you’d like an interview, every young person in this country who is interested in a federal job knows you have to lie….” Her point was not that people should lie on their job applications. It was that the willingness of many applicants to stretch the truth, i.e., lie, means that government hiring processes may be screening out the people who are honest on their job applications in favor of those who are willing to lie about their experience.

Is it really true that a lot more applicants are lying? Absolutely. When we started using questionnaires instead of crediting plans in the early 1990s, we saw very few applications where it was apparent that the applicant lied in response to questions. If anything, there was a problem with applicants not giving themselves enough credit for their experience. Since that time, more and more hiring managers are complaining that their referral certificates are filled with candidates who have little or no qualifying experience. They got on the certificate by overstating their experience in their responses to the questionnaires.

How does that happen? Some people blame the problems on the technology agencies use to receive and rate applications. Because those systems are just tools agencies use to implement their hiring practices, they are not the problem.

The biggest issues are 1) lack of hiring manager involvement in the hiring process, and 2) inadequate numbers of experienced staffing specialists to run the processes.

Hiring manager involvement from the beginning is critical. The hiring manager knows what s/he needs for the job. Hiring managers know the work, know the organization’s needs, and are the ones who are accountable for results. Sadly, many of them do not get involved in the process until they get a certificate in their hands. By then it is too late to influence the process to make certain the candidates on the list are truly highly qualified. Some hiring managers claim to not have enough time to get involved, others delegate it to administrative staff in their own office, and others say their HR offices do not offer them the opportunity to get involved.

The “I don’t have time!” excuse is nonsense. Delegating the work to administrative staff member is another version of not having time. Hiring the right talent is one of the most critical jobs of a manager. A manager who does not have time to do it needs to find another job. The excuse that HR doesn’t let them get involved is true in some cases. Where it occurs, it should be challenged, because it usually means they are getting bad advice from HR.

I hear from Chief Human Capital Officers and others that agencies do not have enough qualified Staffing Specialists who fully understand the hiring process, know how to do job analysis, understand the variety of assessment tools that are available, and remain engaged in the process from beginning to end. Staffing Specialists who know what they are doing check the results coming from the automated staffing tools and overrule applicant answers to questions when the resume has no evidence that the answer is realistic. Just this week a frustrated hiring manager told me of her experience dealing with applicants for a critical job who had clearly lied. She did the right thing and helped develop the applicant questionnaire, but her HR office offered no help and was unwilling to overrule the applicants’ lies.

When hiring managers step out of the process or amateur staffing specialists trust anything that spits out of a computer, the result is an open invitation to unethical applicants to lie about their experience. Nothing emboldens liars more than knowing they will not get caught. And make no mistake – falsifying an application is lying. It is dishonest, unethical, and grounds for firing.

The problem of lying applicants is real. It does affect the quality of talent agencies are able to hire, and it needs to be addressed. If not, we are disadvantaging the honest applicants and rewarding the liars and cheats. There is no way that is good for government or the taxpayers the government serves.