Uncle Sam as an Employer: Attractive Prospects But Execution is Questionable

By on February 16, 2006 in Current Events, Retirement with 0 Comments

A recent poll at FedSmith.com showed that most readers are working for the federal government because of job security. The benefits package and retirement system also played a big role in deciding to work for the federal government.

With large numbers of federal employees retiring in the next several years, those people leaving will have to be replaced. Will the needs of Uncle Sam’s civilian army be capable of attracting people qualified to take these jobs?

While job security and benefits are a primary concern of today’s workforce, many new employees are not too concerned about these issues when they first start a new job. For many baby boomers who were leaving college in the decade of the 60’s and 70’s, a primary attraction of government when first starting in a new career was a chance to "make a difference" in society–along with just being able to find a job that paid reasonably well because the inevitable crush of people followed this generation directly from school into the workplace.

But what about new job applicants? Will they care about the security of a government job or will the government be an also-ran in looking for new employees?

Are today’s graduates looking for a chance to make large amounts of money quickly? Do they crave the fast-paced environment of a Wall Street firm where they may make a large wad of dough but take the chance they can be thrown out of a job on a moment’s notice because they did not meet the rigid performance requirements?

As it turns out, according to the Wall Street Journal, today’s graduates are often looking for the same thing prized by current federal employees: job security.

The American economy is humming along. Unemployment is very low. The American economy is creating jobs at an astonishing pace. In fact, immimgrants are flooding in (legally and illegally) to take over many of the jobs and are have become a routine part of the American landscape. Anyone who has gone to school and is willing to work can usually find employment in America.

So why the concern about job security?

With outsourcing of jobs to China, India or Mexico, and the public downfall of Enron, the bankruptcy of airline companies, steel companies and the continuing flow of bad news for American auto manufacturers, there is one underlying theme. Employees at companies affected by this flood of bad news often lose their jobs, their retirement pensions and their income.

The American economy is very dynamic. Unlike much of Europe, which is experiencing high unemployment and lackluster job creation, Americans live in a society with more opportunity. But with the opportunity comes higher risk. In the private sector, an employee can usually be terminated "at will." Those with a high paying job can be on top of the world on Monday and out on the street looking for another job later in the same week.

Europe has a more stable workforce. Companies cannot fire employees quickly or easily. That can be good for an employee once he or she begins work. The result is a reluctance to hire new people. Companies don’t want to take a risk they will hire a person who cannot be fired if the employment relationship is not satisfactory. Job creation slows and innovation and creativity suffers.

New college graduates are apparently quite aware of the dynamics of our economy and many of them prefer working for large companies with more secure employment opportunities. Larger companies often pay more, often have better benefits and have more structure.

Those who work for Uncle Sam certainly work for a large organization with lots of structure. Job security is higher in the federal government than most companies, and the benefits are comparable or superior to what is offered by many private firms. A survey of about 29,000 undergraduates by Universum shows that new college graduates put a priority on retirement plans and health insurance and less emphasis on vacation time, bonuses or stock options.

The federal government’s Thrift Savings Plan is similar to the 401(k) plans in private firms and the TSP has a lower expense ratio and is often cited as a model plan for the rest of the country. Retirees in the federal government can take their retirement benefits with them–a benefit offered by only a small number of private firms–even among those companies that offer health insurance at all.

So far, the federal government should look good to a number of new college grads. Is there a downside?

There are at least two downsides. According to the Journal, today’s graduates also prefer having regular, meaningful performance reviews. Their parents often hate them (check out comments from readers in the FedSmith site to see how some people react to performance reviews) but younger people are used to and prefer having regular and frequent feedback. They are used to having feedback for having done a good job.

The use of performance reviews and its relationship with promotions, pay and awards in government is spotty at best. And there is little doubt that attempts to change the system (think of Homeland Security and Defense) to introduce a pay for performance system are inevitably met with criticism, lawsuits, fear, anger and shock that anyone would want to introduce a new system to government.

And, finally, even if many new graduates want to work for the federal government, is the hiring process up to the task? (See "Getting a Government Job: Not As Easy As You Think") Will the hiring process result in getting the best people to work for the government? Will the graduates even be able to figure out the hiring system or will the best and brightest just go to work in America’s corporate structure because they are able to get a decision on their application quicker and easier? (See "Hiring Process Doesn’t Work Well")

There is no doubt that recruiters for federal agencies will have a good chance of getting good people to work for their agency. There are a number of arguments in favor of government employment and most graduates are aware of at least some of them. Whether the bureaucratic machinery is capable of acting quickly and decisively to grab the best people is in doubt.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.