How does an agency improve the customer experience while simultaneously dealing with a shrinking budget, a smaller workforce and maybe even a hiring freeze? It’s a classic federal Catch-22, and while no one has figured out a way to beat the system yet, some federal managers have developed strategies for survival.

The Internal Revenue Service has found itself battling severe budget cuts for years. Its funding is down by more than $1 billion since 2010, and it’s lost around 18,000 employees in that time. This has caused the agency to struggle with customer service in the past.

John Koskinen, IRS Commissioner, said in situations like that, it’s necessary to keep planning for the future, even at the cost of the present.

“If we keep guerrilla war fighting our way through the budget process and just try to stay afloat, three to five years down the road we’re just going to be three to five years farther behind,” Koskinen said during a July 12 Partnership for Public Service panel. “Even at the expense of some of the critical things we have to do day by day, we had to invest in what we called the ‘future state’ — what would the future state experience of taxpayers be, or should be, down the road?’ It’s been a balancing act. I get grumbled at once in awhile because we don’t do in the short term as well as we’d like to in answering phones or dealing with people in person.”

He said his current plan for three to five years in the future is that customers will be able to interact with the IRS like they do with their banks — everything digital and automated, no human involvement required.

But in order to reach that point, he has to divert resources to improving his IT systems, which currently aren’t up to the task. Those resources might be able to hire more employees and improve customer service metrics like call wait times in the short term, but Koskinen is playing the long game.

Brenda Sprague, deputy assistant secretary for Passport Services at the State Department, said resources aren’t as much of a challenge for her agency.

“The best thing about our strategy is that we’re fee funded,” Sprague said during the panel. “So as our demand goes up, so does our resources, and that’s made a huge difference.”

She said what’s most important to her agency’s customer service is the culture.

“I think it’s important to talk about the culture of service, and if that is not inculcated throughout the organization, it’s just not going to happen,” she said. “I think that’s one of my favorite things about passport services. We’ve been doing this since Thomas Jefferson. I did not invent this idea of service. It is there, and I am in awe of the sacrifices people make to make sure people take that trip, get that document.”

Meanwhile, Lynda Davis, chief veterans experience officer at the Department of Veterans Affairs, said that ease of interactions between different agencies is key to her ability to provide for customers.

“Because our customer is the veteran, and by definition, the services and benefits and care they receive from the federal government happens across their lifetime journey, and that includes starting with their point of accession at the DoD, when they become a service member,” she said. “So they interact not only with the DoD and the VA, they interact with the department of education, they interact with HHS, of course they interact with certainly the IRS, and sometimes also with needing to get a passport.”

But it’s important, she said, for employees to understand exactly what customers need. She said that the majority just have quick, simple questions related to office locations, hours and parking, but sometimes they’re looking for longer interactions. Sometimes they call every day because they just want to be listened to. And it’s important for employees to be able to distinguish between the two and deliver what the customer needs.

And that’s something all three stressed as important to bring up customer service scores: employee engagement.

Koskinen said employee engagement can’t be a separate process; agencies have to continuously solicit feedback from and empower the employees on the front lines. And notify the employees when that feedback leads to change, because that makes it feel meaningful.

Sprague said her employees were most engaged while working 20 hours of overtime a month during the hiring freeze. She said grievances and sick time went down, while she heard more instances of feel-good stories from her employees. She said she tried to encourage the improved engagement by circulating thank-yous and positive Yelp reviews.

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