The Earthquake That May Cause a Retirement Tsunami

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By on February 4, 2019 in Retirement with 0 Comments

Large blue wave in the pacific ocean depicting a retirement tsunami

We have been hearing for years that the federal government was facing a “retirement tsunami” because of the aging federal workforce. During all of those years I have maintained that the fears of a retirement tsunami were completely overblown and were based on faulty use of workforce data.

Here is the problem – most projections look at the number of federal workers eligible for retirement today, then look five years or so down the road and count the number of folks eligible for retirement. That would be fine if the workforce were static, but it is not. Many of the people who are eligible to retire do just that – they leave. So the number of people eligible to retire never reaches the massive percentage that are projected.

Just a few years ago I was seeing projections that 30 percent of the workforce would be eligible to retire now. Since then, more than 200,000 people retired, and the number eligible to retire is about 14 percent of the 1.95 million permanent federal employees.

A Retirement Tsunami?

So why the headline about a retirement tsunami?

At the same time I have been arguing that we should not expect a retirement tsunami, I have also said the large number of federal workers eligible for retirement presents both an opportunity and a risk.

The opportunity is that people who are eligible for retirement are more likely to take a buyout when it is offered. Having a large number of people who can retire means agencies that need to reshape their workforce have a relatively easy and low cost way to do it. Offer buyouts and a lot of people will happily leave.

The risk is that people who are eligible to retire are also far more susceptible to “the hell with it” moments. Employees who are eligible to retire and who get frustrated with work or the political situation, or anything else, are far more able to punch out and leave the federal government.

In recent years the number of retirements is actually surprising constant, ranging from 62,000 to 69,000 between fiscal 2011 and 2017. Events that cause a spike in employee dissatisfaction or crush morale are a problem.

What happened with the recent partial shutdown is a great example of that type of event. People are angry, depressed, and mostly not optimistic that our political leaders are going to get their act together. The shutdown ended with an agreement to reopen the government until February 15, 2019. That means in a bit over two weeks, we could be in the same mess again.

If that happens, it may be the earthquake that causes the retirement tsunami to finally strike. If a third of the people who are eligible to retire decide to leave this year, we could see the number of retirements increase by tens of thousands.

Damage to the Hiring Process

We already know that the federal hiring process is broken. We know that the government is struggling to hire young people. What happens if we suddenly have an extra 30 or 40 thousand jobs to fill? Some agencies will be overwhelmed by the vacancies and will not be able to fill them in anything resembling a reasonable time.

As bad as hiring numbers have been, imagine what they will be like now. The government is still a good employer, but the pitch to potential new hires is certainly complicated by seven weeks of shutdown.

If we add another shutdown to that, agencies are going to struggle to explain why it is still a good idea to come to work for Uncle Sam. Good pay? Check. Good benefits? Check. Interesting work? Check. A reliable paycheck? Maybe. Being used as a political pawn whenever it is convenient? Sadly, yes.

Brain Drain

Being able to fill behind retirees is a problem, but it is not even the most troubling aspect of a possible shutdown-induced wave of retirements. The real risk is the loss of expertise.

Those of us who understand talent management in government know that there is a tremendous amount of expertise in government that is not easily replaced. When agencies lose people who know the ins and outs of critical programs, and who know how to get things done in government, new hires cannot easily fill the gap. They do not know how government works. They do not know why a program is the way it is, and the problems the agency experiences. They may have the basics, but not the depth.

Add to that the fact that the government is generally failing in its efforts to bring younger people on board, and what we see is a formula for a disaster. The truth is that the government can be broken, and a widespread loss of expertise is one of the ways it can happen.

We are fortunate to have so many federal workers who are committed to the missions they carry out. They are public servants who bring considerable expertise to critical programs. We cannot afford to break them and push them out the door.

This column was originally published on Jeff Neal's blog, ChiefHRO.com, and has been reposted here with permission from the author. Visit ChiefHRO.com to read more of Jeff's articles regarding federal human resources and other current events along with his insights on reforming the HR system.

© 2019 Jeff Neal. All rights reserved. This article may not be reproduced without express written consent from Jeff Neal.

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About the Author

Jeff Neal is a senior vice president for ICF and founder of the blog, ChiefHRO.com. He has 33 years in federal service, including serving as Chief Human Capital Officer for the Department of Homeland Security and Chief Human Resources Officer for the Defense Logistics Agency. Jeff is also a Fellow and Director at the National Academy of Public Administration and a Partnership for Public Service SAGE.

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