IRS braced to lose experienced technical employees — and newer ones, too

The Internal Revenue Service faces a loss of experienced agency leaders and technical employees that could threaten its tax services, but the agency’s new employees aren’t staying long either, a new report states.

The IRS has about 106,000 employees, including 9,100 managers. However, more than half of them are at least 50 years old, and 39 percent of IRS executives are already eligible for retirement, according to a Treasury Inspector General for Tax Administration report released Sept. 8. The IRS estimates that it would need to recruit one manager a day for the next 10 years to fill the projected shortage.

“While the IRS has recently increased its focus on workforce issues, there is a risk that it may not have the right people, in the right place, at the right time in order to meet the challenges of its changing workforce,” said Inspector General J. Russell George.

The report notes that the IRS has an opportunity to reshape its workforce as the baby boomer generation becomes eligible to retire. But officials also need to pay attention to how many employees leave the agency in the first few years of their employment.

In fiscal 2007 and 2008, more than 15 percent of new IRS employees left the agency in their first year. And in fiscal 2008, nearly 21 percent of employees left in their first two years.

The IRS's challenges mirror those at many other departments and agencies. The state of the acquisition workforce, in particular, is becoming increasingly worrisome as experienced hands leave the ranks. The Federal Acquisition Institute, which issues an annual report on the acquisition workforce, found that 13 percent of contracting officers are now eligible to retire, and 52 percent will be eligible by fiscal 2018. The average age of contracting officers is 46.

The institute and many other federal officials are urging agencies to improve their succession planning, which involves training midlevel managers to take on leadership roles when higher-level employees leave.

TIGTA officials noted that certain statistics can help agency leaders understand their employees' plans. For instance, the IRS just started tracking how engaged and motivated its employees are. Since fiscal 2007, employees' level of engagement has climbed slightly from 3.66 on a 5-point scale to 3.72 last year. The IRS also monitors employees’ job satisfaction. That measure climbed from 64 percent in 2005 to 72 percent last year.