On Thursday, the Federal Deposit Insurance Corporation (FDIC) announced that it would offer voluntary retirement and early separation opportunities to approximately 20% of its workforce as an effort to streamline and reshape the agency for the future.
“Today’s announcement is part of a deliberate strategy to further reduce layers of management, acquire new skillsets, and allow the agency to proactively address succession planning prior to any crisis or emergency situation,” said Chairman Jelena McWilliams via a statement. “This program will enhance our agility, preparedness, and technological transformation.”
As a result about 1,200 of the agency’s 5,800 eligible employees could receive Voluntary Early Retirement Authority (VERA) or Voluntary Separation Incentive Payment (VSIP) notices. However, the announced buyouts are not actually a reduction-in-force or even a cost-cutting measure. Instead it is meant to streamline supervisory roles but more importantly address the issues of a “graying” workforce at the agency.
The FDIC, which was created by Congress in 1933 to restore public confidence in the nation’s banking system, had undertaken a number of reviews over the past year in which the agency has reassessed organizational effectiveness and preparedness. One critical finding was that 42% of the workforce was eligible for retirement within just the next five years – compared to 31% for the broader federal workforce – and that could result in a depletion of institutional experience and knowledge leaving the watchdog short-staffed especially during a crisis. This is a way for the FDIC to get ahead of a potential wave of retirements.
The buyouts will also address the fact that the FDIC has become quite “top heavy,” as over the past 15 years the number of senior managers and executives has grown more than twice the rate of the agency’s total workforce. That created an imbalance that has challenged its ability to be agile while impacting the long-term goal of supporting employee empowerment and succession management.
The voluntary retirement and early separation program will allow the agency to free up resources that will go to other areas at the FDIC including information technology (IT), computer science, data management and loan review departments. In addition, the financial watchdog announced that the buyouts will not be available to bank examiners.
Field Offices Shuttered
American Banker reported that the FDIC will close several field offices in the coming years as the respective leases expire. This will include the offices in Tulsa, OK, Gainesville, FL, Hopkinsville, KY, Memphis, TN, and Cincinnati, OH – while banks will be reassigned to new field offices. In addition, a field office in Elizabethtown, KY will be relocated to Louisville.
Offices in Boston and Los Angeles will reportedly consolidate with other facilities in their respective region.
Those mid-level and senior staff who agree to leave the agency will receive incentive payments worth up to six months of their salary, while a smaller percentage of FDIC employees in the administrative and clerical positions in the field could receive a full year’s salary. The latter employees could also be eligible for career management, retraining and other services.
Federal News Network reported that the incentive payments are “significantly higher than what most federal employees are familiar with,” and added that under federal law most agencies could offer incentive payments worth up to $25,000 for Title 5 Employees, while financial regulatory agencies such as the FDIC will compensate their workforce differently than appropriate agencies.
Eligible employees can apply for VERA/VSIP and the application period opens March 12 and will run through April 10. Those approved for an early retirement or buyout will be notified by May 4, and employees selected for the buyout can begin to leave the watchdog agency beginning on May 9. The FDIC said the goal is to have this concluded by June 6, but noted that this may be delayed by mission needs.
The FDIC is just the latest agency to see such a shift in its workforce. Last summer the Bureau of Land Management (BLM), which is responsible for managing public lands for a variety of uses such as energy and mineral development, livestock grazing, recreation and timber harvesting, announced that it would relocate its headquarter functions and other supporting offices to Grand Junction, CO.
The move came as 99% of the lands and programs overseen by BLM were located in the Western half of the United States, and as a result the BLM direct, deputy director of operations, assistant directors and a few members of the staff were relocated while most of the positions previously located in Washington, D.C. were moved to the new location in Colorado.
In November the BLM announced that it notified 159 D.C.-based employees that they could be relocated either to the new offices or other state offices across the West. Employees were given 30 days to accept the relocation, but as of December only two reported to make the move, reported Government Executive. Those who did agree to move were told they would have priority placement for future openings after joining the career transition assistance plan.
