What have the buyouts achieved? In response, we reviewed whether the downsizing goals of the Federal Workforce Restructuring Act whether agencies’ use of buyouts reflected the administration’s workforce restructuring goals as articulated by NPR; what the demographic results of the buyouts were; how agencies viewed buyouts as a downsizing tool; and what operational impacts were attributed by agencies to workforce downsizing. Buyouts Helped Agencies Downsize With Minimal Use of RIFs

Federal employment levels have declined steadily since the administration’s downsizing efforts began in early 1993. According to OPM data, as of March 1996, non-Postal executive branch civilian employment was 1.96 million, a reduction of almost 230,500 employees (10.5 percent) since January 1993. Had agencies more successfully directed their buyouts to NPR management control positions, the percentage of buyouts in these occupations would probably have been higher than their representation in the workforce. Finally, some agencies may not have restricted buyout eligibility to employees in specific positions because they may have feared morale would be adversely affected if buyouts were offered to one set of employees but not to others. Agencies Often Set Restructuring Goals That Were Less Ambitious Than Those Recommended by the Administration

Another likely reason for the minimal change in levels of management control positions is that agencies said they could not meet NPR’s workforce restructuring goals without adversely affecting their ability to carry out their missions. Indeed, several individual agencies have already met or exceeded their reduction goals. 3). RIFs, an alternative method of downsizing, could have resulted in higher separation rates of such individuals. Of these, the largest number of respondents said that downsizing resulted in the loss of corporate memory and expertise and created work backlogs because key personnel were separated. Backlogs have been created and some “nice to do” actions are no longer being performed or are significantly delayed. These included various reengineering and automation initiatives as well as contracting out work formerly done by federal employees. Matters for Congressional Consideration

To ensure the most cost-effective use of any future buyouts and to help mitigate the adverse effects that can result from poorly planned downsizing, we recommend that Congress, in reviewing HR 2751 or other legislation that would grant buyout authority to agencies, consider:
Requiring agencies to do strategic and workforce planning as a prerequisite for receiving buyout authority and to implement downsizing consistent with the results of their planning efforts.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed several issues related to the federal employee buyout program, focusing on: (1) whether the Federal Workforce Restructuring Act's downsizing goals are being achieved; (2) whether agencies' use of buyouts reflects National Performance Review (NPR) downsizing goals; (3) the demographic results of the buyouts; and (4) how agencies view buyouts as a downsizing tool.

What GAO Found

GAO found that: (1) between January 1993 and March 1996, non-postal executive civilian employment decreased by 230,500 employees; (2) employee buyouts have minimized the use of reductions in force (RIF); (3) agencies have not met NPR restructuring goals, since the percentage of management positions has not significantly changed; (4) agencies often set lower downsizing goals for management positions, since they do not specifically target buyouts to these positions; (5) agencies that plan their buyouts have more successful outcomes; (6) buyouts have allowed agencies to increase the representation of minorities and women in the workforce, who likely would have been adversely affected by RIF; (7) 72 percent of buyouts have gone to employees taking regular or early retirement, and some employees may have delayed their separation so they could receive buyouts; (8) most agencies believe buyouts have been an effective downsizing tool, but downsizing has caused operational problems such as the loss of corporate memory and expertise, increased workloads and backlogs, skill imbalances, and more overtime; (9) some agencies believe that downsizing has hindered their ability to carry out their missions; (10) agencies have used reengineered work processes and automation to offset personnel reductions, but a few agencies are using contract employees, some of whom are buyout recipients; (11) outsourcing work may offset some downsizing benefits and be inconsistent with the act's purpose; and (12) agencies could have mitigated some of the adverse impacts of downsizing through better strategic and workforce planning.