Tsunami Warning – How Might the Next Wave of Federal Workforce Retirements Impact Federal IT?
Published: August 28, 2013
It’s like déjà vu all over again. Another wave of the federal workforce retirement tsunami is said to be approaching with even stronger swells to follow. So how much of the federal IT workforce will be part of the latest anticipated outgoing tide of retirements?
Citing government figures, the Washington Post recently reported that the number of executive branch employees retiring in fiscal year (FY) 2013 is set to exceed 80,000, nearly double the number of total retirements in 2009. That is about 5 percent of the federal workforce. The rate appears likely to accelerate too. According to the article, about 94,000 people age 60 and older worked for the government in 2000. By 2012, that number had climbed to 262,000, a 179% increase. Further, by 2016, more than a third of the federal workforce will be eligible to retire.
The Post goes on to ponder whether the reductions could afford agencies the opportunity to shift some resources to hire people with critical skills in cybersecurity and information technology, etc., so let’s take a quick look at some IT workforce data from the Office of Personnel Management (OPM) to get a sense of whether the federal IT workforce is undergoing similar retirement issues.
The data on the age and average length of service of the federal IT workforce reveals a handful of generalities:
- 30% of the federal IT workforce has been in their job less than 5 years
- 47% is over the age of 50
- Those over the age of 50 have an average service tenure of just under 21 years.
Comparing the age of those in the IT workforce with the average length of service shows a large portion – over 52% – are between the age of 40 and 54. Looking at the Average Length of Service line we see that the slope gets noticeably steeper for that age group, meaning the average tenure relative to age increases at a faster rate. This seems to suggest that these people are staying with the government. (See chart below.) The fact that the number of federal IT staff drops off rapidly at age 60 and beyond raises the issue of retention at those age and career levels.
In order to keep steady supply to feed into this mid-career age bracket agencies need to effectively recruit younger staff while retaining experienced staff to lead, manage, and mentor. Below is a graph comparing the number of new hires and the number of those leaving over the last six fiscal years from 2008 to 2013. (The FY 2013 data is what is available to date and reporting may lag.)
Hiring rose steadily from 2008 to 2010, but then declined at increasingly higher rate from FY 2010 to FY 2013. The resignation and retirement curve was somewhat a mirror reflection – those rates declined from FY 2008 to FY 2009, but then started to increase between FY 2009 and FY 2011, remaining steady in FY 2012. (See chart below.)
With hiring limitations and pay freezes in place the last few years it’s not surprising that these rates declined. Similarly, with stagnating compensation, early-out incentives, and retirement benefit policies changing, it makes sense that we would see an increase in departures. The key here is to keep the green hiring bar markedly higher than blue retiring bar. But to truly maintain high-quality IT service levels a large portion of the new hires must have significant experience so that they do not require years of training be productive. Over the FY 2008-2013 time period nearly 60% of IT hires were between the age of 30 and 49. While age is not a perfect indicator of experience or competency it does give some indication of the potential for relevant experience. (See chart below.)
The fact that more than half of the federal IT workforce is under 50 bodes well for the medium-term if the government can retain and leverage their more experience colleagues so that the younger staff can be trained and developed. Still, agencies will need to keep a steady stream of less experienced but skilled IT professionals entering the workforce.
Overcoming the challenges of hiring freezes, salary constraints, and training budget cuts is key, not to mention managing workload and morale issues. But compared to the federal workforce as a whole the OPM data seems to suggest that the IT workforce is at least reasonably positioned to ride-out the latest retirement tsunami wave.