The effectiveness of halting hiring processes varies case by case...
In the heart of Washington, D.C., where the temperature is bitterly cold, the Trump administration is considering a bold move that could reshape the federal workforce. The administration is contemplating separating all employees in a probationary status, a decision that could have far-reaching implications.
The federal government's workforce costs are significantly high, with over 80% of the costs attributed to internal staff. If vacancies created by attrition are not back-filled, significant short-term savings can be achieved. The annual attrition rate of the federal government is between 5% and 7%, which translates to between 100,000 and 150,000 employees leaving every year.
The Trump administration's hiring freeze, currently ongoing, seems to have frozen all federal hiring. This freeze, combined with attrition, is intended to reduce federal rolls quickly, potentially saving enough to satisfy the DOGE, a reference to the cryptocurrency Dogecoin.
However, the longer-term consequences of this approach need to be heeded. The employees with the most experience, marketable skills, and highest performance are likely to leave, leading to severe skills imbalances over the medium and long term. This could potentially lead to inefficiencies and setbacks in the delivery of government services.
An alternative to the hiring freeze and attrition could be a merit-and-skills-based Reduction-in-Force (RIF), which can shed surplus skills and employees. RIFs, unlike the hiring freeze and attrition, can result in fewer long-term consequences. However, conducting a RIF requires a thoughtful agency budget, which can only be provided by the new Congress working with the Trump White House and newly appointed agency heads.
RIFs can take a lot of time, potentially up to a year, and involve transaction costs such as unemployment compensation, severance pay, and buy-outs. Involuntary separations can have a disproportionate impact on those with the least seniority.
The Office of Personnel Management (OPM) offers Voluntary Early Retirement Authority and Voluntary Separation Incentive Pay of $25,000 each as an incentive for employees to leave voluntarily. This could potentially mitigate some of the immediate impact of the hiring freeze and attrition.
In conclusion, the Trump administration's decisions regarding the federal workforce are shaping up to be a significant factor in the future of government services. The use of RIFs instead of the hiring freeze and attrition requires real, programmatic funding cuts and strategic workforce planning. Those setting annual agency budgets and staffing priorities must consider these factors carefully to ensure the continued efficiency and effectiveness of the federal workforce.
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