Overview

The current threat of $500 billion in cuts to the Department of Defense budget has federal contractors, both large and small, wondering what the future holds. The defense budget grew from $316 billion in 2001 to $708 billion in 2011. In the decade since 9/11, most people can’t remember the last time the DOD budget went down in subsequent years (it was 1985 to 1997). So how did we get here? In a word: debt.

Looking Back

A year ago, members of Congress were at odds as to whether or not raising the U.S. debt ceiling or suffering a default on our debt was the lesser evil. As House Republicans expounded the need for spending cuts, the ensuing “deal” with Democrats to raise the debt ceiling produced two things. First, the partisan squabbling and 11th hour game of political “chicken” was the catalyst for Standard & Poor’s reducing the venerated U.S. credit rating from AAA to AA+ for the first time in history. The second result was the Budget Control Act of 2011, which essentially pushed debate on debt reduction back another twelve months. The two primary mandates in the Budget Control Act require $917 billion in federal spending cuts over the next ten years (with roughly $500 billion coming from defense cuts) and automatic spending cuts known to folks in Washington as “sequestration.” Looming in early January 2013, sequestration would force another $1.2 trillion in immediate budget cuts with about half coming from the Defense Department. That is, unless the members of Congress can reach agreement on a different plan.

The Dilemma

Cuts of this size come at a bad time for the United States of America. Before 9/11, the primary threat the Defense Department was prepared for was bold aggression from large nation-states. It made sense at the time, as it was all military planners knew to prepare against. In recent years, the majority of concerning and credible threats to national security haven’t come from other countries, but rather small extremist groups, domestic terrorists, and cyber-criminals. The last few years have proved that it doesn’t take much time, money, or talent to hack an electrical grid, disrupt a banking system, obtain and use assault weapons, or blow up a building. Unfortunately, the government is sitting on a plethora of expensive tanks, ICBMs, and fighter jets, that while reassuring to have waiting in the wings, aren’t much use against a hacking collective, fringe extremist group, or lone gunman. To counter modern and evolving threats, the Department of Defense is trying to evolve as well. The dramatically increased use of unmanned aerial vehicles, both at home and abroad, indicates the strategic priority of having eyes in the sky, continuously watching and gathering data and intel. At the same time, cybersecurity has dominated recent national security discussions, as our defense systems, infrastructure, and banking networks come under a 24/7/365 assault.

Hiring and Firing

In the face of approaching budget reductions, what does all of this mean for the average security-cleared professional and how will it affect hiring? How can defense industry employers and recruiters best navigate through the confusion? Understand that the budget landscape is changing rapidly. This means that defense industry recruiters need to be up-to-date on the most current developments. That in mind, there are a few key items to keep an eye on for developments:

Stopgap Measure – Congress will vote in September on a $1 trillion stopgap measure that will keep the U.S. government operating through March 2013 at 2012 levels. Doing this would mean that traditional budget appropriations for defense projects won’t be named any time soon, thus giving defense industry employers and candidates less confidence of future funding than they are accustomed to.

Sequestration – Knowing the current status on possible sequestration will be critical to gauge how likely cleared professionals will be to switch employers. The more sequestration and its sweeping defense budget cuts look like they will occur, the more cleared workers will be eyeballing new jobs that they perceive as more secure. Expect an increase in cleared candidates asking for networking opportunities, newly updated resumes, and job applications submitted. By staying informed on sequestration and its schedule, employers can estimate the best-timed opportunities to network with prospective candidates, and shape their hiring messages to address their concerns.

WARN Act – The Worker Adjustment and Retraining Notification Act (or WARN Act) is a 23-year-old U.S. law from the Department of Labor which requires most employers to provide 60 days advance notice of mass layoffs to employees. Some states have similar laws. As luck would have it, 60 days prior to the scheduled January sequestration would be the same week that Americans go to the polls to elect a new President. Naturally, the current administration has suggested that employers could hold off on sending dismissal notices to personnel. Long story short – there’s ongoing debate as to whether or not employers will actually send out the pink slips to their employees. Companies are put in a tough position as they don’t want to be breaking the law by not sending out the notices. However, employers may actually not have enough concrete information to send out layoff notices that would comply fully with the WARN Act. Many in the news media believe that most companies would rather vaguely comply with the WARN Act and send out notices, rather than not send out notices and face hundreds if not thousands of individual lawsuits from fired employees. The verdict is still out, but make no mistake, nothing turns a passive candidate into an active job seeker faster than the threat of mass layoffs.

Similar to the possible January sequester, employers and recruiters should watch the news, stay current, and time themed hiring messages accordingly. Committed employers with open jobs to fill can engage in an effective networking campaign now, and not wait for forthcoming news to come in. In this climate of uncertainty, even the threat of layoffs motivates most workers to get out there and see what job opportunities are available. Recruiters can remind cleared professionals of the WARN Act, and build their talent benches by connecting with prospective employees.

Next Steps

Aside from closely following the news, savvy employers and recruiters should start putting together appropriately-themed hiring messages now. Explain the debt and budget predicament clearly and express that you are happy to be a resource of information for candidates, as well as a potential future employer. Build your online presence and reputation by keeping engaged with cleared workers where they live on the internet. This can be done by keeping a full and complete profile on The Cleared Network, joining niche groups, commenting on articles, helping candidates with questions, posting links to useful online resources, and establishing and promoting your company’s referral awards program. Target the workers of companies that are most likely to comply with the WARN Act. If the layoff notices hit cleared employees’ desks, your name and face should be top of mind to those affected.

Related News

Evan H. Lesser is the Co-Founder and Managing Director of ClearanceJobs.com. Before founding ClearanceJobs, Mr. Lesser managed technical projects with CACI for the U.S. Navy's Science and Technology directorate at the Pentagon, and for the Joint Technology Panel on Electronic Warfare. Previously, he worked for Boeing on its Reserve Component Automation System program for the U.S. Army in metro Washington, DC. Mr. Lesser has a degree in Philosophy from the University of Georgia in Athens, and lives and works in the Atlanta metropolitan area.