The Earthquake That May Cause a Retirement Tsunami

We have been hearing for years that the federal government was facing a “retirement tsunami” because of the aging federal workforce. During all of those years I have maintained that the fears of a retirement tsunami were completely overblown and were based on faulty use of workforce data.

Here is the problem – most projections look at the number of federal workers eligible for retirement today, then look five years or so down the road and count the number of folks eligible for retirement. That would be fine if the workforce were static, but it is not. Many of the people who are eligible to retire do just that – they leave. So the number of people eligible to retire never reaches the massive percentage that are projected. Just a few years ago I was seeing projections that 30 percent of the workforce would be eligible to retire now. Since then, more than 200,000 people retired, and the number eligible to retire is about 14 percent of the 1.95 million permanent federal employees.

So why the headline about a retirement tsunami? At the same time I have been arguing that we should not expect a retirement tsunami, I have also said the large number of federal workers eligible for retirement presents both an opportunity and a risk. The opportunity is that people who are eligible for retirement are more likely to take a buyout when it is offered. Having a large number of people who can retire means agencies that need to reshape their workforce have a relatively easy and low cost way to do it. Offer buyouts and a lot of people will happily leave.

The risk is that people who are eligible to retire are also far more susceptible to “the hell with it” moments. Employees who are eligible to retire and who get frustrated with work or the political situation, or anything else, are far more able to punch out and leave the federal government. In recent years the number of retirements is actually surprising constant, ranging from 62,000 to 69,000 between fiscal 2011 and 2017. Events that cause a spike in employee dissatisfaction or crush morale are a problem. What happened with the recent partial shutdown is a great example of that type of event. People are angry, depressed, and mostly not optimistic that our political leaders are going to get their act together. The shutdown ended with an agreement to reopen the government until February 15, 2019. That means in a bit over two weeks, we could be in the same mess again.

If that happens, it may be the earthquake that causes the retirement tsunami to finally strike. If a third of the people who are eligible to retire decide to leave this year, we could see the number of retirements increase by tens of thousands. We already know that the federal hiring process is broken. We know that the government is struggling to hire young people. What happens if we suddenly have an extra 30 or 40 thousand jobs to fill? Some agencies will be overwhelmed by the vacancies and will not be able to fill them in anything resembling a reasonable time.

As bad as hiring numbers have been, imagine what they will be like now. The government is still a good employer, but the pitch to potential new hires is certainly complicated by seven weeks of shutdown. If we add another shutdown to that, agencies are going to struggle to explain why it is still a good idea to come to work for Uncle Sam. Good pay? Check. Good benefits? Check. Interesting work? Check. A reliable paycheck? Maybe. Being used as a political pawn whenever it is convenient? Sadly, yes.

Being able to fill behind retirees is a problem, but it is not even the most troubling aspect of a possible shutdown-induced wave of retirements. The real risk is the loss of expertise. Those of us who understand talent management in government know that there is a tremendous amount of expertise in government that is not easily replaced. When agencies lose people who know the ins and outs of critical programs, and who know how to get things done in government, new hires cannot easily fill the gap. They do not know how government works. They do not know why a program is the way it is, and the problems the agency experiences. They may have the basics, but not the depth. Add to that the fact that the government is generally failing in its efforts to bring younger people on board, and what we see is a formula for a disaster. The truth is that the government can be broken, and a widespread loss of expertise is one of the ways it can happen.

We are fortunate to have so many federal workers who are committed to the missions they carry out They are public servants who bring considerable expertise to critical programs. We cannot afford to break them and push them out the door.

An Open Letter to Federal Workers

Dear Federal Employees,

This letter is addressed to all federal workers, so I am dividing it into three sections. One for those who were forced to work without pay, one for those who were furloughed, one for the 1.2 million of you who were not affected – this time.

First, for those who were forced to work without pay, on behalf of most of the American people, please accept our apology. The idea that we would use your labor without any compensation is sad. In many respects, the federal government is an outstanding employer. The biggest area where it is not is the one you just experienced. No matter how much they know it never really works out, politicians just cannot help themselves when they see an opportunity to use federal workers as political pawns. Most people realize that is wrong, and most of us realize that, rather than being pawns, you are public servants who do the people’s work. You guard our borders, your ensure air travel is safe. You inspect our food, you track and prevent disease, you help us with our tax problems, you do countless other tasks that are vital to our nation’s security and economic well-being. We just spent 35 days benefiting from your expertise and labor, while many of you worried about how you would pay your mortgage, or your rent, or feed your family. Some of you did not have the money to buy gas to get to work. That is not how the greatest nation on earth treats anyone, and certainly not how we want to treat people whose work is so vital.

For those of you who have been away from work for a month, welcome back! More than 400,000 federal employees did not work for more than a month. I have heard some folks say you got a paid vacation for five weeks, so why complain? A vacation? Really? I have to assume those comments are the result of ignorance rather than malice. When we go on vacation, we plan it. We may leave town. We know when it will end. And we know we will be paid for it when it is over. This shutdown was not like that. You got a Christmas gift of a shutdown – a giant lump of coal from our elected leaders. Until Congress and the President passed and signed a bill guaranteeing back pay, you were not certain you would be paid for the time you were off. Even then, you missed two paychecks. Most people realize that missing a paycheck is traumatic. Missing two is worse. You have bills to pay, and some of you did not have enough savings to get through the shutdown. And you were told you would need to be able to report back to work with 24 hours notice. That means stay close to home. So much for a vacation …. What made matters even worse was the people saying that the government does not need so many people because nothing bad happened while you were away. They clearly do not know what was not getting done while you were gone. Hiring people for all of those “excepted” jobs where people were forced to work for no pay stopped. Training new people stopped. Awarding contracts for vital services stopped. Inspections stopped. Countless other tasks that most people have no idea they rely on stopped. And now that you are back, you probably have a backlog that will take months to catch up.

More than a million of you were not directly affected by the shutdown. You work for the Department of Defense or other agencies that had appropriations, or you work in an agency with working capital funds or some other non-appropriated funding. Some folks are saying you are not affected, so why should you care? Those of us who work or have worked in government know the truth. You look at what happened and remember that it has happened to you too. Past shutdowns included large parts of Defense and other agencies. You know that we are eight months from the beginning of fiscal 2020 on October 1 and we are still talking about fiscal 2019 appropriations. You see how dysfunctional the appropriations process has become. And you know that 2020 is an election year.

So we have two million federal workers who have a lot going through their minds. Is this going to happen again on February 15? Should I retire? If I am not close to retirement age, should I find a job in the private sector? Or state or local government? Should I go back to school? Should I change careers and do something totally different?

The best advice I can give to federal employees is to not make career decisions now. The stress of this shutdown is too fresh, and it may cloud your judgment. Retirement, in particular, is a decision you should make carefully. Once it is done, you cannot undo it and come back as a regular federal employee. If you are eligible to retire now, you will be later in the year, or next year. If you are not eligible to retire and are considering leaving government, consider your options carefully, and not while you are recovering from the trauma of the shutdown. Are shutdowns miserable and unfair? Absolutely. Should you be treated the way you were? No way. Is the government a terrible employer? No. Other than these political stunts, government is still a good employer. It offers good benefits, including a defined benefit pension. It also offers the opportunity to serve and do great work. And at least part of the misery this shutdown caused landed where it can really make a difference for future shutdowns – with the politicians. Many of them appear to have decided that they do not win these things, and just look bad. While some of them may not act in your interest, you can take some comfort in knowing they will always act in their own.

I and millions of others appreciate the work you do. We understand the stress you endured and hope it does not happen again. And we respect public servants for the good they do every day, not just during Public Service Recognition Week.