OPM issues how-to guide for layoffs

Following the White House's budget proposal calling for sweeping cuts across civilian agencies, the Office of Personnel Management released a handbook preparing agency heads for how to handle workforce cuts.

The handbook provides guidance for agency heads and human resources departments to handle what OPM calls the "reshaping process” in the face of looming budget cuts and the 90-day hiring freeze set to expire in April.

While agency budgets are still subject to congressional approval, the agencies themselves will have to determine if workforce reductions will be necessary given budget changes. They will have to work with their human resources departments to carry out personnel changes.

Ronald Sanders, former OPM associate director for human resource policy told FCW that the guidance is "well-timed," but he emphasized that reductions in force should be a "last-resort" strategy, pursued only after other reassignment and retraining avenues are exhausted.

The guidance offers alternatives to reductions in force. Specifically, it suggests detailing employees to other agencies on a reimbursable basis, furloughing employees, reassigning staff  to other positions at the same grade, retraining workers to move to other positions, freezing hiring or promotions and allowing the workforce to shrink through attrition.

Sanders cautioned that "attrition is not the most effective way to achieve workforce reductions. It is random and, even worse, the people with the most marketable skills tend to be the ones to leave."

He added, "if you let attrition be the only way to reduce the workforce, over the long term, you run the risk of creating skills imbalances."

The report also suggests that employees who would otherwise face the chopping block could volunteer to change to a lower grade, reduce their hours, retire early or negotiate a buyout. For civilian agencies, that buyout number is $25,000, an amount that Sanders, who first instituted the buyout and set its value in the early 1990s, said needs to be reformed.

The OPM guidance states that agency management and human resources offices should coordinate on workforce reduction decisions before finalizing them, but Sanders emphasized the importance of including employee unions in personnel discussions.

Sanders said that while managers have the right to make cuts if necessary, "unions can be indispensable" when it comes to preparing safety nets for released employees and educating agencies on how to best handle personnel decisions.

If reductions in force are ultimately determined necessary, agency management and human resources should consult with public affairs, congressional relations and communications offices "to establish an effective communication strategy" to keep employees as informed as possible, the guidance states.

Sanders also said employees may be more inclined to pursue voluntary reductions in compensation or work if agency managers "tell it like it is" and are "prepared to live up to the promise to do whatever [they] can to avoid reductions."

In terms of the specifics in handling reductions in force, agencies should first set up a team of full-time employees to handle personnel actions related to the reduction in force -- such as updating personnel records and determining employee benefits. This team should review agency positions, verify employee performance metrics, coordinate with management and human resources as well as determine employee benefits and retention rights.

After employee cuts are made, human resources should emphasize "that effective counseling is critical to minimize disruption resulting from" the workforce reductions, the report states.