Agencies can soon rehire former employees noncompetitively, at a higher grade level than when they first left the federal government, thanks to a new policy from the Office of Personnel Management.

OPM finalized the regulations Tuesday, and it views the new rehiring flexibility as a tool to help agencies quickly rebuild capacity and fill vacancies with talent already familiar with how the federal government works.

The new regulations go into effect next month.

Currently, agencies can reinstate former federal employees to positions in the government, but only at the same grade level they had when they left the civil service.

This has long been a point of frustration for human capital practitioners in government, who say the existing structure offers talented employees who have since gained valuable skills and expertise in the private sector no incentive to reenter federal service.

But with OPM’s new hiring flexibility, agencies have the discretion to rehire former employees noncompetitively and at a higher grade level, provided they advertise the position to the public and candidates are actually qualified for the job.

“This regulation will support the Biden-Harris administration’s efforts to rebuild the federal workforce by giving agencies a new recruitment tool that will allow them to attract former employees, including those with specialized skills,” Kathleen McGettigan, OPM’s acting director, said in a statement to Federal News Network. “The rule allows the government to better recognize a former federal employee’s full set of skills and experience as agencies continue to rebuild capacity and expertise.”

Former employees who want to reenter federal service must have been separated from government for at least year and must have received a performance rating of at least “fully successful” to qualify for a reappointment, according to OPM.

Agencies don’t have to use the new rehiring flexibility. But OPM said the regulations offer agencies more choices — and potentially a wider pool of candidates — as they staff up and fill vacancies.

Allowing agencies to noncompetitively reinstate former employees who are already familiar with government processes may allow them to more quickly inject talent back into their organizations, OPM said.

The Department of Housing and Urban Development said it often loses grant managers, underwriters and appraisers, and others working for its rental assistance programs to non-profit organizations or local lenders in the private sector.

“With us, we really are trying to rebuild our capacity,” a senior HUD official told Federal News Network. “We want to try to get folks on board. A lot of times we don’t have the luxury of getting employees up to speed once they come on board. It’s ideal if they can hit the ground running. This provides us with an opportunity to help us with our succession planning to bring on folks with the [right] skillsets. They know how to navigate the ‘federal red tape.’ They can hit the ground running with some of the federal experience that they have, because federal programs are very, very different from the private sector. ”

About 1,200 positions are on HUD’s hiring plan today, and the department has filled about half of them, the senior department official said. Once the new rehiring regulations go into effect, HUD will reevaluate its hiring plan and identify positions where it could use this flexibility.

IT specialists and economists are other natural candidates for this rehiring flexibility, the HUD official said.

In many cases, managers at the department’s field offices know many of those former employees who left government for the non-profit or private sector, because they continue to work with their former colleagues now as HUD customers and grantees, the senior official said.

Former employees can bring the insights they gained as an external HUD customer back to the agency, and the department can use that feedback to improve its own internal processes and become a more efficient organization, the senior official said.

The new rehiring flexibility could also help HUD fill vacancies and address turnover challenges in regions with higher living costs.

“We have a high turnover rate in San Francisco,” the senior HUD official said. “A lot of our employees end up leaving the federal government in San Francisco because they get a higher salary, which they need in order to support the cost of living. If we were able to reinstate employees at a higher salary in some of those high costs areas I think would be very valuable for us.”

OPM first published draft regulations on this topic back in December 2019. A majority of agencies, individuals and federal employee groups who responded to the draft policy said they supported it.

But a few questioned whether the new rehiring flexibility is unfair to current federal employees and could be abused.

OPM said it built enough safeguards into the rehiring regulations to ensure agencies follow veterans preference and other priority hiring lists and choose the candidates who are most qualified for the job. It reiterated on multiple occasions: Agencies have the discretion to use this rehiring flexibility, or not.

Current federal employees already have promotion and career track opportunities, OPM added.

“OPM believes that permitting these choices will enhance the quality of hiring, and thus government, generally, and enable agencies to exploit knowledge, skills, and abilities acquired and developed both within and outside the federal sector, enhancing diversity of thought and methods and enriching the workforce,” the new regulations read. “In that scenario, the federal government recoups the value of the training and development invested in the employee when he or she was previously in federal service and recoups the benefit of the additional training and development the person received while working outside of government.”

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