August 27, 2013
Falling budgets, morale spur exits; managers fear a veteran brain drain
A wave of retirements by senior federal employees has begun rolling across the government as aging baby boomers who held on to their jobs during the economic downturn are increasingly calling it quits.
With retirement accounts on the rebound, many veteran workers are finding little reason to remain in government, especially when agency budgets are being slashed, workers are being furloughed and morale is tumbling.
The number of executive branch employees retiring this fiscal year, which ends next month, is on track to be nearly twice the total who retired in 2009, according to government figures. And the rate looks certain to accelerate. In 2000, about 94,000 people age 60 and older worked for the government. Last year, the number was 262,000.
The exits are helping to bring down the size of the federal payroll and – where funding is available – could afford agencies the chance to hire younger workers with crucial skills. The retirement of clerks is clearing the way for experts in cybersecurity and information technology.
But among those leaving are people with specific expertise that cannot easily be replaced – including nuclear physicists at the Energy Department and a large cohort of air traffic controllers who were hired three decades ago. And with most hiring on hold, the departures are already reshaping agencies that cannot replace most of the retirees or mentor and train new executives.
In some corners of government, the challenge is acute. By 2016, 42 percent of the Department of Housing and Urban Development workforce will be eligible to retire. At the Small Business Administration, it’s 44 percent.
There is no mandatory retirement age for most civilian federal employees. But retiring is looking ever more attractive, employees say, with their salaries frozen for three years by Congress and public service demonized by many politicians.
“It finally got to the point where I got disillusioned,” said Richard Swensen, 60, who retired from the Agriculture Department last year after 38 years. “You get weary of the bureaucrat-bashing.”
Today’s federal civil servants are much grayer than they were a decade ago. Their average age is 47, four years older than the overall workforce.
Retirements have fluctuated since the mid-1990s. The numbers surged when the Bill Clinton administration offered early retirement incentives as part of a push to “reinvent government.” After the attacks of Sept. 11, 2001, the government ramped up its hiring for national security positions, and federal payrolls swelled.
Baby boomers began trickling out in about 2005, but the financial crisis and deep recession that hit a couple of years later discouraged many from leaving. Departures from the executive branch bottomed out in 2009. They have been increasing ever since and are on track to exceed 80,000 retirements – about 5 percent of the workforce – by the end of the fiscal year, according to figures from the Office of Personnel Management. It’s already the largest outflow in at least two decades.
“The [stock] markets have recovered,” said Gregory Parham, assistant secretary for administration at the Agriculture Department. “And many people are thinking, ‘This is a good time to go.’
In addition, about 34,000 Postal Service employees retired in this fiscal year through July, with many taking early-out incentives. Add to that swelling numbers of younger federal workers who have been exiting the government, discouraged by public disdain, furloughs and budget austerity.
By 2016, more than a third of the federal workforce will be eligible to retire, according to the Government Accountability Office, which has put the pending loss of so many experienced workers on its “high-risk” list of management challenges for government.
Among them will be nearly three out of five senior executives and almost half the ranks of top managers.
Swensen kept working at the Agriculture Department four years past the day he was eligible to retire. He would have stayed longer, he said, but his long commute from Catonsville, Md., was tiring him. But with bills pending in Congress to change the way retirement annuities are calculated, Swenson said he was convinced that his earnings could soon be based on his highest five earning years instead of the highest three, as they are now. That would cost him: “It would have made a few thousand dollars difference in my check,” he said.
In interviews, recently retired senior executives from across the government offered a range of reasons for their decisions to leave. Most cited the pay freeze, the public’s negative opinion about federal workers and government spending cuts, which have resulted in furloughs, less overtime and a larger workload for many.
Craig Charles retired last year at 49 after a 25-year career in customs and immigration enforcement in Kansas City. He said he left the Immigration and Customs Enforcement agency “very unhappy,” in part because of frustration with inexperienced political appointees who were in charge. Also, he hadn’t had a raise in three years, “and that was getting pretty old.” And as a manager in charge of air operations, budget cuts weighed on him.
“Everybody was under the constraints of sequestration and a lack of money,” he said. “It was constant scrambling for the budget.”
Peter Henry retired from the Department of Veterans Affairs in 2011 after working there for 41 years and 11 months. He had run two hospitals for veterans in the Black Hills of South Dakota and received a pair of prestigious awards for high-performing senior employees, the last in 2010. But amid criticism in Congress over federal pay, his supervisors told him to keep the $12,000 bonus he was awarded a secret. “It was like, ‘You will be shot if anybody discovers you got this,’ˆ” Henry, 66, recalled.
This year, the Obama administration eliminated the awards and most bonuses for top managers.
“I certainly didn’t want to be part of being embarrassed and ashamed of what I did for a living,” Henry said. “It was a very honorable profession.”
Thirty-two years ago, President Ronald Reagan fired more than 11,000 striking air traffic controllers who had refused his order to go back to work, and his administration hired an entirely new workforce, bringing on 9,000 replacements in 1982 alone.
Now, many of those controllers are hitting their mandatory retirement age of 56. This is perhaps one of the most dramatic, and urgent, challenges posed by the growing wave of departures.
About a third of the 12,700 controllers who direct planes at airports across the country could leave today, the GAO said. In three years, half the force will be eligible. The Federal Aviation Administration has stepped up hiring in recent years, bringing on about 750 new controllers a year.
But new hires, who start as apprentices, require between three and five years of training before they are considered fully qualified. More than a third of the current workforce has been on the job less than five years, according to the air traffic controllers union.
“It’s a young person’s occupation,” said Patricia Gilbert, executive vice president of the National Air Traffic Controllers Association. “But an overwhelming number of them are inexperienced.”
And hiring stopped altogether when automatic federal spending cuts took effect March 1.
The Social Security Administration, meanwhile, could be headed to what its personnel chief calls “a perfect storm.”
Even as the overall American population is aging and making more disability claims, many of the agency’s administrative law judges, who rule on disputed claims, are themselves heading toward retirement. The average age of these judges is 59. Two out of three will be eligible to retire in 2016, the GAO said.
Since the job pays especially well by federal standards, many of the agency’s 1,500 judges serve well beyond the retirement age. But the retirement rate is creeping up, and Reginald Wells, the SSA’s human resources chief, said the agency is already feeling the effect. “We’re losing more judges than we’re replacing,” he said.
A surge in disability claims with fewer judges to handle appeals of rejected ones has created a backlog, with wait times of 375 days on average, according to government audits. About 90 judges have retired so far this year, and not all their posts will be filled, Wells said.
With no government-wide plan in place to deal with projected retirements, individual agencies have been making their own preparations, and the GAO has found alarming inconsistences.
Angela Bailey, the Office of Personnel Management’s chief human capital officer, said it’s crucial for every agency to put a priority on training up-and-coming managers. “No matter what your budget is, you’ve got to set aside dollars to invest in the current workforce to make sure they’re operationally ready to succeed into leadership positions.”
But to achieve the 5 percent budget cuts required by sequestration, almost every agency made reductions in training and hiring. Many zeroed them out.
Some agencies have done a much better job of planning for retirements than others. NASA, for instance, gets high marks from personnel experts for reinvigorating its recruitment campaign. Engineers who can design and develop unmanned rockets are in demand, replacing the flight engineers and payload specialists who worked on the space shuttles.
The Department of Housing and Urban Development, meanwhile, has come under repeated criticism from GAO auditors for its haphazard planning. The agency’s most recent plan for hiring, training and developing talent expired in 2009. The GAO said in March that the lack of planning is jeopardizing the department’s mission of promoting affordable housing.
A HUD official said that department officials are responding to the criticism by ramping up their planning for staffing vacant positions – but that not every opening can be filled.
“Maybe people had one thing in their portfolio before,” Karen Newton Cole, deputy chief human capital officer, said. “We now need to train them to have two or three things.”
To encourage seasoned employees to stay on the job, Congress approved a “phased retirement” policy 18 months ago. For the first time, retirees could continue working half-time while they receive a partial annuity. In return, they would mentor and train potential successors.
The rules are awaiting approval.