The Growing (and Retirement Eligible) Federal Workforce

A new report from the Government Accountability Office warns of a wave of new retirements, saying that as much as one third of federal employees will be able to eligible to retire by September 2017. The report also notes that federal spending on total government-wide compensation has increased 10% over 8 years.

The federal government is growing although most of the growth is in three agencies. That is the conclusion of a new report from the Government Accountability Office (GAO).

From 2004 to 2012, the federal non-postal workforce grew by 258,882 employees, from 1.88 million to 2.13 million (14 percent). Permanent career employees accounted for most of the growth, increasing by 256,718 employees, from 1.7 million in 2004 to 1.96 million in 2012 (15 percent).

94% of the increase was within three agencies, the Department of Defense (DOD) which added about 105,000 employees, Veterans Affairs which added about 90,000 employees and Homeland Security which added about 47,000 employees.  These three large federal agencies employed 62 percent of all executive branch permanent career employees in 2012.

At the Department of Defense, agency officials reported that converting certain positions from military to civilian and the growth of the agency’s acquisition and cybersecurity workforce were responsible for the increase in the number of federal employees. At VA, agency officials reported that about 80 percent of employees hired from 2004 through 2012 were hired by the Veterans Health Administration, primarily to meet increased demand for medical and health-related services for military veterans. At Homeland Security, the increase in civilian permanent career employment was due to hiring more people to secure the nation’s borders.

Federal spending on total government-wide compensation grew from $106,097 in 2004 to $116,828 in 2012. The increase was due to a combination of increasing cost of employee benefits, higher pay in some locality pay areas, and the changing composition of the federal workforce in hiring for more expensive professional and administrative positions requiring greater skills or advanced degrees.

Concern about Retirement of Current Federal Employees

About 30% of federal employees employed as of September 2012 will be eligible to retire by September 2017. By 2017, retirement eligibility will vary between agencies from 21.4% in Homeland Security to 42.7% in Housing and Urban Development. Obviously, this could create problems in an agency if there has not been adequate succession planning and keeping the necessary alignment of critical skills in the agency workforce.

The GAO notes that at least 59,000 employees will be eligible to retire each year between 2012 and 2017.

Conclusions of the GAO

Largely because of the growing number of people eligible to retire, the GAO says that agencies should

  1. Take such key steps as determining the critical skills and competencies that will be needed to achieve current and future programmatic results;
  2. Develop appropriate talent management strategies to address any gaps in the number, deployment, and alignment of skills; and
  3. Monitor and evaluate their progress toward their human capital goals. In short, understanding the dynamics of the federal workforce and the drivers of agencies’ compensation costs will help guide decision-making on workforce composition and budgeting.

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. Follow Ralph on Twitter: @RalphSmith47