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Federal Downsizing: Better Workforce and Strategic Planning Could Have Made Buyouts More Effective

Although buyouts of up to $25,000 helped federal agencies shrink the federal workforce by almost 230,500 employees (10.5 percent) between January 1993 and March 1996, some agencies report that the downsizing has stretched them too thin, causing work backlogs, a loss of institutional memory, and skill imbalances. Such consequences could have been avoided had agencies done adequate strategic and workforce planning, which would have increased the likelihood that employees with needed skills and training were retained. In general, agency officials viewed the buyouts as an effective downsizing tool, allowing them to reach their downsizing goals with minimal use of reductions-in-force. The buyouts also permitted agencies to downsize without disproportionately affecting the representation of women and minorities. The largest share of the buyouts was paid to employees who took regular or early retirements. GAO's analysis of separation trends suggests that some employees may have delayed their departures in order to receive buyouts.