Are feds prepared for retirement tsunami?

Tuesday - 12/13/2011, 1:08pm EST

John Palguta, vice president for policy, Partnership for Public Service

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By Michael O'Connell
@moconnellWFED
Web Editor
Federal News Radio

Federal managers have long anticipated an impending tidal wave of retirement, when large numbers of baby boomers start filing for their pensions. Recent figures from the Office of Personnel Management show that many feds may finally be ready to shout "cowabunga" and ride that wave out.

Retirement applications have risen sharply — nearly 25 percent — for the first 10 months of 2011, according to OPM statistics obtained by the Federal Times. At that rate, 104,700 will have filed for retirement by the end of December.

John Palguta, vice president for policy at the Partnership for Public Service, suspects that turnover may be even higher.

"One has to consider, for every two retirees you have at least one other employee who simply quits government to do something outside of government," Palguta told the The Federal Drive with Tom Temin and Amy Morris on Tuesday.

John Palguta,vice president for policy, Partnership for Public Service (Photo: PPS)

Palguta explained that the percentage of people seeking retirement is somewhat predictable, based on employees' eligibility, years of service and age.

"We know we've got quite a few folks and then the trend, unfortunately, for some government managers is pretty clear," he said. "This is the time that folks are starting to pull the plug. It's not just at the federal level. Wisconsin, California, New Jersey, Alabama, Ohio, Florida, all are seeing increased retirements of public sector employees."

According to Palguta, all indications point to an increased exodus of federal employees as well as state and local government employees.

It's not just that baby boomers are deciding to retire. "Some agencies are doing buyouts because of budget considerations and early-out retirements," Palguta said. "You have the pay freeze, proposals to reduce benefits ... and many public employees are simply saying 'OK, we've been on the bubble. We've been thinking about it. Now's the time to go.'"

Riding it out

For managers facing a potential "brain drain" as long-term employees depart, the optimum word is "preparation." That may be tough to do when you're already facing hard times.

"When your boat is riding low in the water, you don't need a tsunami to be swamped," Palguta said. "You just need an unexpected swell that comes over the gun rails."

He listed five things that federal managers should be doing now to ride out the wave.

  1. The time to consider the impact of an employee's departure is before the employee leaves. "A federal manager should be looking at the current workforce and current workload," Palguta said. "They should be thinking 'OK, what would be the impact if this employee or this group of employees that may be eligible left? What would I do to deal with that?'"

  2. Think about how you would go forward if those employees left. How difficult would it be to replace the employees and how long would it take to do so? "Does the budget situation require that you change what you do and how you do it, so that you can actually operate with fewer employees?" he asked.

  3. Talk with your employees. It's all right to ask someone who is eligible for retirement if they are thinking about making a move. "There's nothing wrong with having that honest conversation," Palguta said. "If you have a good relationship with someone on your staff, you can have that conversation."

  4. Let employees, who you'd like to stay, know that you really value them.

  5. "The last thing that I think every manager should be doing right now," Palguta said, "is some scenerio planning." The old Boy Scout motto does apply — be prepared. What can you do now to prepare for your employees' departures?

According to Palguta, many managers have become complacent regarding the retirement of employees, some of whom are finding themselves in a better position to make a move than just a few years ago.

"People don't delay retirement forever," he said. "Now we're actually looking at organizations that are going to be scrambling to get the job done because they don't have enough employees."