Rebuilding federal capacity will require public‑private partnerships

The federal workforce just experienced possibly the most destabilizing year in a century. The Department of Government Efficiency’s rapid, sweeping personnel cuts removed employees with little analysis or understanding of their roles, performance or mission importance. Institutional knowledge was lost with the surge of retirees, and the gaps are now barriers to agency performance.

Stated White House goals include “eliminate waste, bloat, and insularity;” “large-scale reductions in force;” and “Accelerate AI Adoption in Government.” The Tech Force is central to achieving the goals and the latest public-private partnership.

However, the cuts didn’t just shrink the workforce — they disrupted agency operations. Now AI is triggering widespread workflow redesign and changing or eliminating the need for jobs and occupations. The gap between what agencies need and what the system can deliver isn’t just uncertain - the workforce issues are undercutting agency performance. 

The operational fallout is unmeasurable, but reports suggest it’s severe. Federal News Network reported morale at “non-existent” levels, employees describe local operations as “barely running” and widespread fear about job security. Rehiring will help but that does not solve the morale problem. Agency HR offices are or soon will be pressured to address the workforce problems, yet they have to operate within a rigid system that cannot adapt to rapid change.

A proposed answer: Public-private partnerships

The DOGE-driven cuts revealed three structural weaknesses that public private partnerships can help fix.  

• First, the connection of employee skills to mission analysis and agency performance has never been a priority. It will be important to document essential skills and use this in the redesign of jobs.
• Staffing decisions have not accounted for how AI reshapes task, roles and workflows. Now it will be important to identify roles that are mission critical, those that will be redundant and those that will be significantly changed by new technology. That should be a focus of career management.
• The analytical capacity to assess the impact of workforce cuts and new technology is new to HR. It’s a new problem for private employers as well but the impact is far more important in government. Companies are accustomed to change and always focused on improving results. 

The transition to AI and new technology, and the working connection of IT and employees, is proving to be a problem for all employers. It’s been reported as a global issue. The common need suggests working together will pay off and provide an advantage in achieving White House goals.

Public-private partnerships – P3s – have been used in many ways at all levels of government. The most common are infrastructure creation (e.g., bridges, medical breakthroughs, cloud computing) but the importance of P3s extends to science, engineering, medicine, law enforcement – that is where developing and sharing knowledge is a priority for both sectors. 

The P3 format relevant here has been described as “collaborative working relationships between the U.S. government and non-federal actors in which the goals, structures, and roles and responsibilities of each partner are mutually determined.” Memoranda of agreement define what’s involved. Monetary provisions may or may not be included. Examples of P3s include State Department’s Diplomacy Lab and the National Institutes of Health’s Partnership for Accelerating Cancer Therapies.  

The problem was captured in a new Harvard Business Review column, “Why Great Innovations Fail to Scale”: 

“Scaling innovation today depends on contributions from many partners. Too often, innovations fail not because the ideas are weak, but because teams and organizations struggle to work across boundaries. What’s needed is a particular kind of leader: the bridger.”

The common goal is to effectively and quickly integrate AI into operations. The complications are threefold: 1. agencies have vastly different workforce issues, 2. the applications and impact of AI vary by occupation and 3. the staff cuts and skill shortages also vary by agency, occupation and location. The applications will also vary by the layer of use.

The problem is complicated by the explosion of AI companies – it’s estimated there are 90,000 worldwide – and estimates of 70,000 AI platforms – and the numbers change daily. A recent IBM survey of CEOs found that while leaders are still confident that AI is pivotal to their future, only 25% of their current AI initiatives delivered the returns on investment they had hoped for. (Other estimates are in the same range.)

The partnerships should bring together occupational experts from professional associations, labor economists, technology specialists and private and public HR experts. There are hundreds of professional associations – a search count shows 441 – that support specific occupations. (The Directory of Associations lists 38,000 of all types.)

Involving associations and expert members elevates the new knowledge above political partisan battles, it also makes it more unlikely it will be ignored – as new HR practices have been in the past.

Professionals look to their associations for training, research, best practice information, compensation information, job opportunities, skill requirements, etc. Specialists from the larger employers would be able to document – if it has not already been done – where AI can improve work, new skill requirements, new training needs, projecting talent needs, sequencing AI rollout, measuring AI’s impact. 

The planning should have both an immediate and future focus since the changes will continue and cannot be fully anticipated.

The knowledge and assistance generated by the partnerships would also benefit state, county and local public agencies. They may not require the same levels of expertise but many jobs are very similar. Civil engineering jobs, for example, are very similar at every level. Joint private-public initiatives will increase performance along with the trust of government.  

An added complication - Talent shortages

The U.S. as well as many developed countries will be confronted by talent shortages for the foreseeable future. It’s demographic trends – fewer young workers and older workers retiring.  In the years of the pandemic, many workers left the labor force. Now of course immigration is severely restricted.

The shortages are especially important in healthcare. With the aging population, the shortages threaten the health of millions. Physician shortages are severe in certain specialties, in rural/non-urban areas, and in long-term care and home health. Demand is rising faster than the supply for nurse practitioners, registered nurses and behavioral health fields. The value of enhanced speed is obvious but also important is the enhanced accuracy of the data interpretation. The integration of AI is essential to improving healthcare.

The staff cuts combined with the continuing hiring freeze (with few exceptions) amplified the problems filling vacancies. The recent 1% increase in pay highlights the long recognized problem of below market pay. If AI is unable to substitute for the roles normally held by recent hires, more experienced employees will need to shift time to the routine tasks and either their workload or their performance will be problematic. Government performance will deteriorate further.

When and if the hiring freeze is erased, agencies will need months and more likely years to raise performance levels. Training takes time. And beyond the education and on-the-job training, it takes practice to develop practical skills and integrate employee efforts in the workflow. These are not “system” issues.

The partnerships could be structured to enable agencies to “borrow” talent from private employers. They could also share training facilities and develop rotational programs.

The fact is, however, that many government problems are more complex than in the typical business.

The shortages also affect the skills new managers need to develop. COVID and working remotely changed the skills needed to be a good manager. It also elevated attention to the importance of managers. That has never been given adequate recognition by federal agencies. The practice of simply adding “supervision” to a job description or performance dimension is a badly failed policy.

The AI-supported work environment shifts the focus to the softer skills like problem solving. However, they cannot be mastered in a classroom or on a website. Becoming a “good” supervisor, for example, requires practice and coaching. Identifying essential skills is only the first step. 

Government as a testing ground

Government successes implementing AI could enable private employers in all sectors to learn the best strategies for using the new technologies. The hundreds of locations, occupations and variations in local staffing situations provide opportunities to assess how to best integrate technology and worker skills. Local offices could also test how to best handle new tasks. They could also test varying strategies to help employees develop needed skills.

This could be arranged as a typical contract with a consulting firm but the new “answers” will be valuable to all employers relying on the same occupations. No company should gain an advantage; the knowledge should be broadly available. The country would benefit.

Office of Personnel Management analysts could use the experiential data, for example, to predict employee turnover under specific circumstances as well as testing the best recruiting strategies. All employers will need to understand how the rapidly emerging technology is changing occupations and work management practices.

The importance of government performance – that is service quality, measurable improvements in people’s lives, enhanced national security – not simply efficiency and reduced costs – is important to everyone. A prosperous economy, supportive infrastructure and a healthy workforce are important to all employers.

That should make the successful integration of the new technology and workforce management a national priority. All employers need to understand how automation and AI will reshape work tasks and systems, redesign job families and careers, prompt training needs and support employee engagement in the new work environment.

That makes it important to evaluate ongoing agency experience in the rollout of technology. The usual broad studies of commissions take too much time; their recommendations could be outdated before reports are released. With the explosion of workforce issues, federal HR offices do not have the needed time or resources to analyze and develop government-wide recommendations. 

The bottom line – the need to rethink the civil service system

Government’s work environment will never be the same. It’s vastly different then when the civil service model was created. Today’s work management paradigm is also wholly different.

The hiring freeze will need to end in the near future – unless AI replaces all workers. The practices controlled by the Classification Act (originally 1923, then revised in 1949) are antiquated, and will be a high barrier to rebuilding the workforce. 

The work changes and media reports also affect the federal “brand” as an employer. With the ongoing rollout of AI and work changes, the needed training is hard to document. And federal pay has long been a problem. Aside from tech specialists, who would choose to work in the current work environment?

This would be an ideal time to create a P3 with one or more of the several HR associations to develop recommendations for a new civil service system suited to today’s work environment. The HR functions in high performance organizations is vastly different than government’s century old system.