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The Post-Shutdown Blues

For many federal employees, the government shutdown was a traumatic event. The private sector may be able to glean lessons from how some federal agencies go about re-engaging their employees.

Thursday, October 24, 2013
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Now that the federal shutdown is officially over, the managers and supervisors of government workers have their hands full re-energizing their direct reports in the wake of an event that most experts agree was devastating for engagement and morale.

"Getting people re-engaged in work is a mission that's going to require a certain level of precision and delivery," says Bernadine Karunaratne, president of Korn/Ferry LTC's government team.

The subject has been the topic of the many calls Karunaratne says she's been having with her federal clients.

"The social contract has been rewritten for every federal employee," she says. "They're thinking, 'OK, the stability and the mission of this job have been taken away from me.' People are dealing with a lot of emotion, and supervisors need to be able to accommodate that."

Federal employees weren't the only ones directly affected: Thousands of employees who work for government contractors were also idled by the shutdown.

Many of these firms were issued "stop-work" orders that required them to cease all work as the shutdown went into effect. In many cases, these employees -- unlike federal workers -- will not be getting back pay, says Brett Johnson, a partner at Snell & Wilmer in Phoenix who represents clients that perform work for the federal government.

"The large companies saw the writing on the wall a while back and started preparing for the possibility of a shutdown ahead of time," he says. In many cases, those companies -- mostly large firms -- bolstered their cash reserves so they could keep paying their employees during a protracted shutdown. Their small and mid-sized counterparts, however, did not fare as well, says Johnson.

"The smaller companies either lacked the resources for a long-term contingency plan or assumed the shutdown would last for just a few days, at most," he says. As a result, many of their employees did not get paid.

In such cases, these companies may have the option of obtaining financial compensation from the government via arbitration, although success is hardly guaranteed, says Johnson.

Even at some large contractors, employees who were allowed to take accrued leave or borrow leave during the shutdown so they could continue receiving a paycheck eventually exhausted such resources as the shutdown ground on longer than most expected, says Connie Bertram, co-head of the government practice at Proskauer in Washington.

In some cases, government contractors may have another problem on their hands: Foreign employees whom they employ in the United States on work-based visas having to return home, thanks to the shutdown, says Bertram.

"If they're not permitted to work because of a stop-work order, the issue then becomes: Does the contractor continue paying the foreign nationals, even though it would be unfair to its American workers who aren't getting paid either, or does it cease paying them and run the risk that their visas will no longer be valid and they'll have to go back to their home country?" she says.

The shutdown's timing was particularly inconvenient given recent trends in engagement levels among federal workers.

Kris van Riper, head of the government practice at Arlington, Va.-based business-advisory firm CEB, says the last two years have been a "perfect storm" for driving down engagement among federal employees. A combination of pay freezes, the budget-slicing "sequestration" approved last year by Congress and President Obama, and the shutdown has dampened morale among many federal workers, she says.

"The most recent [Office of Personnel Management] engagement surveys are showing that the percentage of federal employees who report feeling empowered is on a downward trend and we expect that to continue in light of the budget sequestration and the shutdown," says van Riper.

As for the future, van Riper says the ongoing political uncertainty in Washington -- the current government-financing agreement expires in January -- will likely have an impact on many employees' decisions whether to remain a part of the federal workforce for the long-term.

In fact, it's the federal employees between the ages of 50 and 60 that the government should be most worried about, says van Riper.

"Everyone's focused on the imminent retirees -- those aged 60-plus -- but the 50 to 60 age group is twice the size of the 60-plus group," she says.

The 50-to-60 group represents approximately half of those who retire from federal service each year, says van Riper. During the financial crisis, those employees tended to stay put, viewing government as safer, she says. Now, given the continuing instability, those employees may decide it's not worth sticking around.

"We're concerned about this group representing a retirement wave that no one sees coming," says van Riper.

Can managers and supervisors be taught to successfully rally employees to overcome a setback like this and move forward?

Some government agencies -- particularly the ones that had high levels of employee engagement to begin with -- will be better positioned than others to get their workers back on track, says van Riper.

"The agencies that are the best at engagement do a handful of drivers very well," she says.

Those drivers tend to boil down to ensuring that each employee understands the agency's mission, strategy and his or her place in it, says van Riper.

Agencies that excel in this area include NASA, the Patent and Trademark Office and the Internal Revenue Service.

"The IRS has fantastic levels of employee engagement," says van Riper, adding that this helped the agency regroup after it was hit by scandal earlier this year involving alleged abuses regarding tax-exempt applications by Tea Party-aligned groups.

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CEB's research shows organizations that start out with high levels of engagement are better able to withstand shocks and take less time to get employees back to their previous high levels of engagement, compared to organizations where engagement was already low, she says.

"Most IRS employees had nothing whatsoever to do with that scandal," says van Riper. "Supervisors there tend to be very methodical in talking about the importance of their mission and helping employees focus on things that are within their span of control."

In addition to reconnecting employees, she says, managers who are successful at re-engaging workers in the wake of a disruptive event also tend to focus on the following three areas: navigating role complexities, empowering workforce contribution, and focusing on the future.

"The least-successful managers tend to try and remove complexity from the work environment, but we've found that that's not only a fool's errand, it's also negative for engagement because it makes employees feel as if they're not trusted to make their own decisions," says van Riper. "The best managers clarify the rules, clarify how decisions are made and offer advice on how the employees might prioritize and navigate on their own."

"Empowering workforce contribution" refers to managers who work to eliminate the barriers and roadblocks that tend to impede employees from achieving their objectives, says van Riper, while "focusing on the future" means helping employees focus on future development opportunities within the organization.

Karunaratne points to a leadership competency model called Dealing with Ambiguity, intended to help leaders guide employees through times of uncertainty.

"I've had at least 20 conversations with government-agency leaders this week about the need for more comfort with ambiguity and the fact that so many employees will be returning physically but not emotionally engaged," she says.

Current employees aside, how will the recent shutdown affect the federal government's future ability to attract sought-after talent? Karunaratne says federal service remains attractive to many top college graduates.

"It's a tough question to answer at this point, but many graduates -- if not all of them -- are drawn to a strong sense of purpose," she says. Top graduates tend to want to solve deep and long-standing problems -- it's this mission, rather than the prospect of a cushy job, that tends to attract them to government service, she adds.

Self-interest won't be entirely absent from the equation, either: A large number of senior-level government executives will be retiring in the near future, she says, opening up many opportunities for talented and agile employees.

How each agency maneuvers its way through this time of crisis will determine its success in attracting future talent, says Karunaratne.

"A big selling point for the younger generation will be agencies that were able to re-mobilize their people quickly via engaged leaders capable of creating these conversations and true levels of transparency -- they'll say 'That's the agency I want to go work for,' " she says.

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