06/03/2011 05:05 pm ET | Updated Aug 03, 2011

The Myth of "Rightsizing" the Federal Workforce

Guest Post by Alicia Mazzara

President Ronald Reagan was no fan of big government. But would the man who famously said, "As government expands, liberty contracts," agree with the latest efforts to contract the federal government?

One week ago, the House Subcommittee on the Federal Workforce met to discuss "rightsizing" the federal government. So just what is "rightsizing"?

It's a politically correct way of saying cutting people's jobs. In other words, rightsizing is the new downsizing.

While the House debates how many federal jobs are needed to keep the country running, government agencies are taking steps of their own to save on labor. Earlier this month, the Department of Agriculture became the first cabinet-level agency to offer "buyouts" that encourage employees in certain positions to retire early. Smaller agencies, including the U.S. Postal Service, Federal Trade Commission, and Air Force Material Command, also began offering buyouts earlier this year.

We are living in austere budgetary times, and government has a reputation for being bloated and inefficient. No one, not even the average federal worker, disagrees that we need to do more with less. However, it's exceptionally difficult to figure out what the "right" size is. Moreover, shrinking the federal workforce often means increasing the number of contractors, which does not translate into cost savings.

This past week, federal workers have been mulling the following Washington Post article by Joe Davidson. Davidson highlights the following statistic: There are currently 2.1 million federal workers and approximately 10.5 million government contractors and grantees. This growing imbalance is a big deal considering that contractors are usually costlier than federal employees:

Carol Davison, a Human Resources Specialist at the Department of Commerce, explains:

[R]eplacing Feds with contractors is not more effective or efficient because government employees do the same work for less money. Additionally, they are the subject matter experts on programs under analysis and should perform it because they will be responsible for providing the service.

In fiscal year 2010, the federal government spent $537.5 billion dollars on contracts. In other words, rightsizing is starting to look like we're just robbing Peter to pay Paul.

Carol also raises a second important point: federal workers have specialized knowledge that a contractor may not have. By cutting federal jobs or encouraging federal workers to retire early, government runs the risk of losing critical institutional knowledge. Learning takes time, and the benefits of this knowledge are often difficult to quantify.

Moreover, trading federal workers for contractors doesn't really shrink government or our costs. The question should not be about size, but about creating well-functioning government. Federal employees have plenty of ideas on how to save the government money. Kathryn S., a Strategic Affairs Officer at the Mississippi Department of Employment Security, offered several alternatives:

Streamlining processes, eliminating deadwood employees, crafting retirement options, combining (truly) duplication programs would all reduce costs. Applying the same models to the sacred cows of security and defense would also reduce costs. None of these options are being explored.

Anita Arile, a Management Analyst for the government of Guam, brought up the role of technology:

Today's government must find balance between technological resources and human resources. Although technology can replace several human resources, it is the agency's responsibility to ensure that the human resource available are knowledgeable and capable of continuing the processing flow manually.

Through technology, many agencies are capable of minimizing paperwork by sharing common data. This has proven to benefit both the public and the employees of several California health care agencies.

As Davidson points out, the question of workforce size depends on the task at hand. Ultimately, any conversation about "rightsizing" must address the intended role of federal government. You can't figure out how many people are right for the job if you don't know what it is. But most importantly, it is not really "rightsizing" if we are simply swapping out federal workers for more expensive contractors.

To say that we can fix government simply by reducing its size is an oversimplification. As President Obama said in his commencement speech at the University of Michigan: "What we should be asking is not whether we need 'big government' or a 'small government,' but how we can create a smarter and better government."

Alicia Mazzara is a Graduate Fellow at GovLoop and is currently pursuing her master in public policy at the George Washington University. In a past life, Alicia worked in consumer protection at the Federal Trade Commission.