Trump Enters Presidency at ‘Pivotal Moment’ for Federal Workforce

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Hassan A. Kanu

Dec. 2 — President-elect Donald Trump’s incoming administration is poised to reshape the federal workforce, and the effects could last until long after a first or even a second term, according to a former Department of Homeland Security personnel chief.

The incoming administration will have about 4,000 political appointments to fill, similar to previous incoming presidents. But a “Trump effect” on the government workforce may endure quite a while given the combination of the usual vacancies, the president-elect’s “drain the swamp” rhetoric, and the very large and growing cadre of non-appointed career employees who are retirement-eligible.

“We tend to focus so much on presidential transitions at the political level,” where people are appointed and must be confirmed by Congress, Mallory Bulman, director of research and evaluation at the Partnership for Public Service, told Bloomberg BNA. But “its important to remember that the country relies on the skills of the senior executive cadre, some of whom manage over 200 employees and oversee a budget larger than 100 million dollars,” Bulman said.

Federal employees classified as Senior Executive Service members work in key positions just below top presidential appointees, bridging the gap between political leadership and civil servants in their agencies. SES members operate and oversee nearly every government activity in about 75 federal agencies.

No ‘Tsunami’ but Wave Could Still Crash

The Office of Personnel Management during the administration of President George W. Bush predicted that large numbers of retirement-eligible SES members and other federal workers would leave at the same time—a notion that became known as the “retirement tsunami.”

The prediction never came to pass and isn’t likely to, Jeffrey Neal, the former DHS personnel chief and current senior vice president of ICF International, told Bloomberg BNA.

“It was a colorful term people liked to talk or write about, but it was based on looking at data the wrong way,” he said. “When someone looks at today’s workforce and says such amount will be eligible to retire in five years, that assumes a static picture. But there are people that will retire within five years, some who will quit, some who might die, and many are replaced with people who aren’t retirement-eligible, so people tend to overpredict.”

Nonetheless, as more and more older or career employees do become retirement-eligible, it gets more and more likely that large numbers of baby boomers will eventually leave their agencies, Bulman said. Indeed, although many have abandoned the “tsunami” phrase, commenters still talk about an ongoing “retirement wave.”

“The SES is at a pivotal moment,” in light of the fact that most are eligible to retire within 10 years, Bulman said, referencing a report on the state of the SES that the Partnership for Public Service co-authored with McKinsey & Company in June.

Half of Senior Staff Eligible at Most Agencies

“Within the next three years—so within the president-elect’s first term—50 percent of senior executive service employees at every agency except OPM, HHS, USAID and Commerce will be eligible to retire,” Bulman said. “Almost half of the SES at the Social Security Administration, the Department of Education, and the Department of Justice are eligible to walk out the door right now.”

Many federal employees who are eligible for retirement have opted to stay at their jobs for different reasons, including the financial crash of 2008.

“Those people may have delayed their retirement for a bit, but the market has improved and is back on the rise,” Bulman said.

Eligible SES members are likely to be more comfortable with the thought of retiring today than in recent years. “That could allow the administration to shape not only the executive branch, but also the federal workforce and career employees who will be there long after the administration is gone,” Neal said.

‘Dramatically Different’ Policies Could Spur Retirements

Those eligible to retire might leave simply because there are many new changes in the workplace or because they oppose the positions and policies espoused by a new administration.

“The turnover in SES members has been happening for several years,” Neal said. “What you do find though, is sometimes the turnover rate pops quite a bit when there’s a presidential transition—these people work with political appointees so they do sometimes leave not long after” their boss is replaced, he said.

Many SES members “are very marketable” and can find another job easily, said Neal, who was in the SES for 13 years before leaving for the private sector.

“The fact that the incoming president is, let’s say atypical, could also cause a bump in retirements, people might just not want to deal with something dramatically different,” Neal said.

Larger Effect for Environment, Health-Care Agencies?

Federal government employees tend to be very supportive of the mission of their employing agencies. This is particularly true in agencies “where people view what they do as a sort of calling,” Neal said.

“If you view your job as a calling, and the incoming administration isn’t particularly interested in your calling, you may be more likely to walk out the door,” he said.

People at certain agencies who come to believe the administration doesn't respect or value their organizational mission might opt to retire, Neal said. “If they think the administration doesn’t care, rather than presiding over dismantling it, they may leave,” Neal said. “That could cause a surge of turnovers in certain agencies, depending on what the administration wants to do.”

Neal pointed to agencies that administer Medicaid and Medicare and the Environmental Protection Agency particularly.

“If you’re an incoming administration, you don’t view this as a risk, you look at it as an opportunity to hire a lot of the people you want,” Neal said.

“Obviously organizational culture starts at the top, but that’s not just appointees, it's also the SES,” Bulman said. “This is a time for leaders and supervisors to build relationships with supervisees, communicate and talk about what exactly you’re going to end up doing” as an agency, he said.

To contact the reporter on this story: Hassan A. Kanu in Washington at hkanu@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law