The Trump Administration is saying they would like to reduce the Federal workforce by 10 percent via deferred resignations and early retirement. Is that a reasonable number? Is a widespread offer of deferred resignations and early retirement the way to do it? And what impact would large scale reductions have on delivery of vital Federal services?
Let’s start with the approach. Inviting people to leave without doing any analysis of the impact is not a great approach. It is the Silicon Valley “move fast and break things” way of making changes. The problem is that it does not take into account that many people who leave will be providing services that agencies must continue. “Breaking things” does not make sense if it means breaking the Department of Defense, or the Social Security Administration, or any of countless other agencies that provide services the American people want and rely on. That does not mean significant reductions are impossible.
The reality is that most agencies could shrink their workforce by reviewing how they operate, where they have work processes that are more about bureaucracy and less about quality, or where processes have evolved over time with little regard to efficiency. Years ago at the Defense Logistics Agency, we had overhead functions that were far too costly. The Agency’s customers were very sensitive to the overhead cost the Agency added to the cost of goods and services. At the same time, overhead services such as HR, finance, and technology were fragmented and every field activity did what it wanted. The result was higher cost and lower quality services. We started remaking those services, beginning with HR.
Our HR operation was fragmented, expensive, and slow. By changing how we delivered those services, we were able to consolidate HR work into two operating HR offices, each with a small onsite presence in major field activities. That transformation took only 11 months to complete. As a result, we reduced the cost of HR services by 28 percent. We reduced our average time to fill jobs from 120+ days to 62 days, and we dramatically improved customer satisfaction. By being deliberate, basing our changes on a thorough scrub of every major work process, and deciding we would do what was best for the Agency and its customers (rather than protecting the turf of everyone involved), we made cost reductions that people told us were not possible. In fact, one General guaranteed what we were doing would fail. He was wrong. A field Senior Executive said what worried him most was that the Agency Director was listening to me and my unrealistic ideas about how we could transform HR services. That SES member presided over a field activity with the highest ratio of HR people to customers, and his organization had an average fill time of 270 days. They could give birth to new employees in the time it took to hire someone.
In the end, the naysayers were totally wrong. We delivered the savings we said we would deliver. We reduced the cost and involuntarily separated only a handful of people. Others took early retirement, found other jobs on their own, or were reassigned to other vacant jobs in the Agency. As a result, we began centralizing other support functions in the Agency, leading to significant cost reductions.
I found similar issues in the Office of the Chief Human Capital Officer at the Department of Homeland Security. My office was 75 percent contractors and 25 percent federal workers. The contractors were, in many cases, grossly overpriced. One contract cost more than $400K per year for each person doing what was basically GS-13 level work. There was no way you could load the cost of a GS-13 to get to a cost to the government that would come anywhere close to $400K per year. We terminated the contract, hired federal workers, and saved the taxpayers significant dollars. In fact, by reversing the staffing ratio from 75/25 contractors to 75/25 federal workers, I was able to return $10 million dollars of my annual budget for use elsewhere in the Department. Because that was working capital fund money that came from the components, that meant returning that $10 million to Customs and Border Protection, the Transportation Security Administration, Immigration and Customs Enforcement, and other DHS components.
A government-wide scrub of agencies and how they deliver services could produce the 10 percent savings the Administration is seeking. Much of it would come from support services, but mission functions are also ripe for review. Agencies tend to evolve over time, with little attention paid to reviewing how they do their work. As long as the mission is being accomplished and Congress is appropriating the dollars, there is little reason to go through the pain of process reviews, analysis of staffing levels, and reviews of contracts to see if the agency is actually getting value for the dollars it spends.
Rather than a fire hose approach that looks for random attrition to produce savings, a well thought out approach can save dollars without breaking services. It could send a message that the government takes costs seriously, and recognizes that taxpayer dollars should never be wasted. By reducing staffing (both contractors and Federal workers) to the lowest levels absolutely necessary to deliver services, the Administration could achieve results and still deliver services effectively.
My fear is that blindly offering incentives for people to leave rarely results in losing the right people. It does nothing to rethink how work is done to make it as efficient as possible. In fact, it is likely to result in less efficiency, widespread confusion, and mission failures. That may sound appealing to people who want government to fail, but I believe the American people want a government that does not waste their tax dollars and still delivers services. No one wants a broken Department of Defense, a Social Security Administration that cannot approve and pay benefits, or a Department of Health and Human Services that misses the next pandemic until it is too late and people are dying.
My hope is that after the initial rush of enthusiasm for going after some agencies, the Administration will settle in and start a more methodical and well thought out approach to reviewing agencies and making cuts. The savings could be meaningful and the results could be a more efficient and effective government.
ChiefHRO.com 