The federal government’s HR department is a mess.
The federal government’s HR department is a mess. Congress should consider outsourcing its functions to the private sector.
L ast month, the now-Republican-controlled House Oversight Committee held a hearing in order to review a federal agency called the Office of Personnel Management. Though it’s not exactly the sexiest-sounding agency, the OPM has a very important function: It oversees most of the federal government’s civilian workforce — more than 2 million employees. Think of it like the government’s HR department.
What the Oversight Committee found is disturbing, but not surprising. In addition to the waste we’ve come to expect from bloated bureaucracies, the committee also discovered massive inefficiencies plaguing the OPM. And since the OPM manages the personnel of other agencies, its inefficiencies have wreaked havoc throughout the rest of the federal government. The Oversight Committee made recommendations for how to improve the sclerotic OPM, but the best solution would be to abolish it altogether and outsource its operations to private-sector HR companies.
In its management role, the OPM has been failing miserably, wasting billions in taxpayer dollars while failing to ensure that federal bureaucracies are doing their jobs properly.
Back in January, the U.S. Government Accountability Office revealed that the OPM has been awarding health benefits to ineligible participants, costing the taxpayer upwards of $1 billion per year. Incredibly, the OPM did not consider ineligible members as a potential source of fraud, and so it never bothered to verify whether they were paying out benefits to the wrong people.
Other operational problems abound. As the government’s HR department, the OPM is responsible for processing retirement applications. But since its application-processing procedure is slow and antiquated — the office still uses a mostly paper-based system — many federal employees are left waiting for months. As the Federal News Network reports, “Currently, it takes an average of 81 days for OPM to process an employee’s retirement claim, OPM’s Retirement Services (RS) division said in a March report — well above the agency’s 60-day goal.”
Processing health-benefit and retirement applications is a job that could be handled more efficiently by private, third-party companies. Because the OPM does not have a profit motive, it doesn’t have any real incentive to do a good job. Private-sector firms have to perform well or risk losing their contracts to competing firms; so far, the only thing the OPM has had to risk is an embarrassing congressional hearing.
Still, if the OPM fails to reform itself, privatization options may become more politically viable. The inability of the OPM to properly manage the federal workforce is also causing inefficiencies at other agencies. As tax day approaches each year, many Americans try contacting the IRS for assistance, only to find themselves waiting on hold for hours. Often, no one answers their calls at all; last year, the IRS answered only 10 percent of incoming calls. Citizens had similar experiences with the Social Security Office, with the average person waiting 40 minutes on hold — a longer wait time than at any other point in the past four years.
Why is service at these agencies so chronically lackluster? One reason might be that so many employees are permitted to work from home rather than at an office where they might be more productive. Even though the president has declared the pandemic emergency to be over, the OPM is still allowing a huge chunk of the federal workforce to work from home. Exact figures are hard to come by — the director of the OPM doesn’t have them — but data from 2021 show that almost half of all government employees were teleworking. Congressman James Comer says the current number is around one-in-three. Considering that federal bureaucracies are notoriously slow and unproductive, it’s not surprising that they struggle even more so when their employees are at home.
For an organization with the size and budget of the U.S. federal government, certain inefficiencies are to be expected. But the problems with the OPM are now too big and too widespread to be ignored. Congress should continue to investigate waste, fraud, and abuse within the federal bureaucracy. But it should also look for more radical solutions, like outsourcing the OPM’s responsibilities to private-sector firms. Given how incompetently the OPM is functioning right now, all possible reforms should be on the table.