Will weak economy make buyouts ineffective?

Debra Roth, partner, Shaw, Bransford and Roth

wfedstaff |

By Jack Moore
Federal News Radio

More agencies are offering buyouts and early retirements, as they try to deal with smaller budgets.

But at some point, if not enough people voluntarily quit, some employees might not have much of a choice.

Debra Roth, a partner with Shaw, Bransford and Roth, joined the Federal Drive for the Legal Loop segment to explain when and how agency can force employees out.

Agencies can’t necessarily force employees into leaving, she said. “But, certainly, buyouts are back,” she added.

Essentially, a successful buyout can be boiled down to the incentives, Roth explained.

“And so the question is: Can they make that incentive big enough and interesting enough and lucrative enough so that people of a certain category … will accept it and leave their position,” she added.

And if that doesn’t work, then “the government goes into RIF-mode,” she said &mdash otherwise known as “reductions in force,” the formal name for personnel down-sizing.

But, so far, she said, she hasn’t heard of any agencies eyeing RIF plans.

Roth pointed to the last big round of buyouts in the 1990s. Then, as perhaps now, the government was looking to restructure its workforce, although it eventually also had to turn to RIFs.

“But the buyout program was pretty effective in incentivizing people to leave government positions,” she said.

The recent round of buyouts announced at the Education Department was not to cut personnel but to ensure the department has workers with necessary skills, agency officials said at the time.

Roth said that also happened in the 1990s and is “clearly a proper use of the buyout program.”

However, Roth acknowledged that in restructuring the workforce based on a specific skill set, employees sometimes see veiled attempts at pushing out the old-timers.

“What is the real motivating factor for the employment action? Is it really because we need a certain skill set — regardless of who has it — or is it because we want a younger work force?” she said.

Aside from the legal niceties, Roth said with the current gloomy economic portrait, many question whether the buyout program will be as effective as in years past.

In the 1990s, many federal employees could retire early from federal service early with a hefty incentive and then still find employment in the private sector, she said.

But especially with the weak economy now, most people who would be eligible for eligible retirement “want to work,” Roth said, “and can’t afford not to work and live on a reduced annuity.”

(Click here for the Buyout Rollout: A list of agencies offering buyouts, early outs.)

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