Human Capital: Agencies Are Using Buyouts and Early Outs with Increasing Frequency to Help Reshape Their Workforces
GAO-06-324
Published: Mar 31, 2006. Publicly Released: Mar 31, 2006.
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Highlights
Under the Chief Human Capital Officers (CHCO) Act of 2002, an agency may request authority from the Office of Personnel Management (OPM) to offer employees voluntary separation incentive payments (buyouts) and voluntary early retirement (early outs) to help reshape its workforce. GAO was asked to identify (1) how many agencies have been granted authority to offer buyouts and early outs and how often agencies used them, (2) how agencies view OPM's role in facilitating the use of these tools, (3) how agencies have used practices associated with effective use of the tools, and (4) what challenges agencies identified, if any, to continued effective use. To respond, GAO reviewed the practices of the Departments of Agriculture, Commerce, Energy, Health and Human Services, Interior, and the Treasury because they were among the most frequent users of these authorities.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Personnel Management | To help ensure that agencies can take full advantage of the authorities to use buyouts and early outs to reshape their workforces, the Director of OPM, in conjunction with the CHCO Council, should share additional information with agencies on examples of how agencies have used practices associated with effective use of buyout and early-out programs to support their programs and achieve successful results. In addition, OPM could support the improvement of approval cycle time and the effectiveness of the programs by facilitating information sharing among agencies, such as holding forums and training sessions on the use of the authorities for agencies with less-experienced staff. |
Closed – Implemented
OPM streamlined its review/approval process and eliminated 50 percent of process steps involved with case management, reducing internal review time from approximately 4.5 days to 1.3 days. In addition, OPM published agency guidance in August 2006 with detailed instruction on the uses of buyout and early-out authorities. Also, an OPM session on early-outs/buyouts, at a November 2006 Interagency Forum for Senior Recruitment and Staffing Policy Professionals, facilitated information sharing and provided guidance on use of the authorities.
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| Office of Personnel Management | To help ensure that agencies can take full advantage of the authorities to use buyouts and early outs to reshape their workforces, the Director of OPM, in conjunction with the CHCO Council, should help agencies identify ways they can determine the extent to which the authorities have been effective tools and will continue to be in the future, and how agencies may need to tailor their reshaping strategies accordingly. |
Closed – Implemented
OPM worked with agencies to tailor their approaches to their reshaping strategies by consulting with agencies on an individual basis to determine whether buyouts and early-outs, or a combination of both plans is most appropriate, based on needs, budget, and overall strategy. For example, after implementation of the authority(ies), some agencies worked with OPM to obtain amendments to expand eligibility coverage, or extensions in order to increase opportunities to reshape workforces and improve effectiveness. In FY 2007, OPM reviewed 142 VERA requests - 137 were approved, 1 was withdrawn by the requesting agency and 4 were returned without further action. Also, in FY 2007, OPM reviewed 104 VSIP requests - 96 were approved, 4 were withdrawn by the requesting agency and 4 were returned without further action. OPM continues to consult with agencies on an individual basis to determine whether VERA, VSIP, or a combination of both plans is most appropriate, based on needs, budget, and overall strategy.
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| Office of Personnel Management | To help ensure that agencies can take full advantage of the authorities to use buyouts and early outs to reshape their workforces, the Director of OPM, in conjunction with the CHCO Council, should assess potential program improvements, such as those the agencies have identified, for possible governmentwide implementation, then take the steps necessary to accomplish this, such as changing the regulations governing the program, or proposing any needed statutory changes. |
Closed – Implemented
OPM has conducted an assessment of potential program improvements to VERA/VSIP based on those identified by agencies. OPM has concluded that government-wide improvements, including lifting the $25,000 ceiling, are not warranted at this time. However, OPM plans to continue to evaluate individual agency proposals and consider government-wide reforms to alleviate any future discrepancies should they arise.
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Topics
Early retirementEmployee buyoutsFederal agenciesFederal employeesLabor forcePersonnel managementStrategic planningEarly-out incentivesCorporate mergersBid proposals