IRS seeks strategy to recruit, retain employees

The Internal Revenue Service must develop strategies for retaining employees to offset a looming staffing shortage due to retirements over the next four years, a panel of agency overseers declared last week.

Members of the IRS Oversight Board, which met on Aug. 15, said human capital issues represent a major strategic challenge for the IRS as its workforce ages and talented employees in critical jobs retire from the agency.

"About 4,000 IRS employees a year for the next four years are expected to retire, taking with them years of experience and valuable skills," said Paul Jones, chairman of the Oversight Board. "Maintaining and growing workforce skills during this period of change must be addressed in a strategic manner."

The agency already has proposed an overall strategy for retaining employees that includes offering bonuses and waiving restrictions on rehiring retired annuitants. Currently, retirees have little incentive to return to federal service because the law cuts their salaries by the amount of their pensions. (Earlier this month, two senators introduced legislation that would allow federal retirees to return to government service without taking pay cuts.)

The IRS' priorities for fiscal 2008 include boosting hiring programs for revenue agents, increasing recruitment for jobs needed during tax-filing season and targeting key demographics in the recruitment pool, the board said.

According to a July report by the nonprofit Partnership for Public Service, the IRS plans to hire 4,600 tax examiners and 3,350 revenue agents through fiscal 2009 to help boost enforcement activities.

Colleen Kelley, president of the National Treasury Employees Union, said the IRS should seek adequate funding and resources to offset staffing shortages. She also recommended that the agency scale back its efforts to outsource some of its debt collection efforts to private companies.

"The IRS doesn't seem to understand that putting the jobs of present employees at risk, even by threatening to contract out their work, is a strong disincentive to recruitment," Kelley said. "That is the opposite of what it should be doing -- which is investing in its workforce."

At the Aug. 15 meeting, members of the Oversight Board also discussed whether the IRS has measures to adequately assess its pay for performance system. And they received a status report on the IRS Business Systems Modernization program, an effort to upgrade the agency's tax administrative and financial systems. The project has suffered delays and cost overruns, but board members indicated they are encouraged by the IRS' recent progress on the project.