Planning for -- and surviving -- sequestration

In July, with five months to the deadline for a possible sequestration, White House officials took an approach that signaled they were expecting the worst but hoping for the best.

On July 31, the Office of Management and Budget released a memo saying OMB and agency leaders would soon convene to discuss implementation plans for across-the-board cuts to agency budgets — the consequence of the so-called supercommittee’s unsuccessful attempt last year to agree on $1.2 trillion in deficit-reduction measures.

The memo added that President Barack Obama remained confident that Congress would act to avoid sequestration. Several weeks later, with no congressional action in sight, federal managers are inching toward a new reality.

So far, little has been said about what sequestration will mean for agency management. The Obama administration delivered a report to Congress a week after its deadline, outlining its plan to achieve the sequestration cuts, which should bring some clarity, said John Palguta, vice president of policy at the Partnership for Public Service.

“Regardless of what is in that report, your employees will want to know how it will impact them and their jobs, and you need to be prepared to respond,” he said. “Even if the answer is that the exact details are still unclear, let them know what you don’t know and that you will share additional information as it becomes available — and then follow through.”

Preparation starts with learning the nitty-gritty about how sequestration works and how it affects agency operations, including the potential impact on contractors and/or program beneficiaries, said Alan Chvotkin, executive vice president and counsel at the Professional Services Council.

The next step is to develop various scenarios for dealing with the cuts, including considering whether employees need to be furloughed or if certain types of contract work must be terminated, deferred or reduced, he said.

Managers should also create communications strategies for the agency’s workforce and any relevant stakeholders in coordination with supervisors, the human resources department and the legal staff. “Don’t accept the inevitable automatic responses of ‘Don’t do anything' or ‘We’re working on it, and we’ll let you know later,’” he added.

Agency leaders must be proactive about dealing with employees’ anxiety. “If employees don’t receive information from their managers and senior leaders, they will look elsewhere for information,” which often results in misinformation that is difficult to counter, Chvotkin said.

Should sequestration come to pass, Chvotkin and Palguta offer three strategies that can help managers deal with the situation.

1. Be honest. Managers need to convey their communication plans to employees and stakeholders “as honestly and as completely as possible, understanding that all details or impacts may still not yet be known or be able to be disclosed,” Chvotkin said.

It’s also important to assure employees that you’re doing your best to minimize the impact on the workforce, Palguta said. “Let employees know, sincerely, that you will do everything reasonably possible to give them advance warning and to also minimize the impact on them personally,” he said. “It’s also OK to let them know that the odds of sequestration going into effect may be quite small.”

2. Be available. Be prepared to discuss in private any questions employees have at each phase of the process because employees will want to know how the cuts affect them personally, Chvotkin said.

On the flip side, be ready to ask for employees’ input and help. For example, if furloughs or layoffs are on the table, supervisors might see whether some employees are willing to volunteer for an unpaid furlough or even for a reduction in force though funds might be scarce for buyouts, Palguta said.

3. Be true to the agency’s mission. Consider all the options available to achieve potential reductions in funding and recommend or select those that will do the least harm, Palguta said.

“There will probably be different combinations of response possible among options such as deferred expenditures, program cutbacks, hiring freezes, staff furloughs, etc.,” he said. “The guiding principle should be selection of that combination of cost-reduction techniques that will have the smallest short-term and long-term impact on mission."