March 27, 2025 • 28 mins
Amid potentially massive job cuts by the federal government, how should leaders manage this disruption?
The Department of Government Efficiency (DOGE) seeks to cut hundreds of thousands of federal jobs while shrinking or eliminating many agencies. How can leaders guide the federal workforce through such disruptions, both for those affected and those who remain?
Join Steve Odland and guest Diana Scott, Center Leader of the US Human Capi
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Steve Odland (00:00):
Welcome to C-Suite Perspectives, a signature
(00:02):
series by The Conference Board.
I'm Steve Odland from The ConferenceBoard and the host of this podcast series.
And in today's conversation, we'regoing to discuss the implications of
the new administration's policy onthe federal and private workforces.
Joining me today is Diana Scott,the head of the US Human Capital
Center at The Conference Board.
(00:24):
Diana.
Welcome.
Diana Scott (00:25):
Thank you for having me, Steve.
Steve Odland (00:27):
So Diana, you've been CHRO in several very large companies and
been part of a lot of change over time.
But this new effort by theadministration is really unique.
This is the Department ofGovernment Efficiency, or DOGE,
which is led by Elon Musk.
And they're trying to take costsout of the government, or waste.
(00:51):
As part of that, they're impacting people.
Talk about what's going on now.
Diana Scott (00:55):
One of the objectives of DOGE is to actually reduce the
size of the federal workforce.
So that's a massive effort, and DOGEhas been focused on a number of
different areas, and there have been manyexecutive orders and proclamations that
are actually pushing this work forward.
So if I can just go over some ofthem, because some of them are huge.
(01:16):
So really, they're looking to potentiallyeliminate or downsize a lot of, or
reorganize, some of the agencies.
So that's number one.
They're looking to relocatefunctions or entire agencies.
So imagine the massivework involved in that.
They've also, many of you haveheard about " a fork in the road,"
(01:38):
the "fork in the road" memo.
So they're providing incentives tofederal employees to actually resign,
which is under legal scrutiny, butstill, that was a major effort.
And at this point, it seems likeover 100,000 employees have actually
raised their hand and said they'reinterested, or they've actually
signed up for this program to resignand get some compensation in return.
(02:01):
They have initiated a hiring freeze, andthere's actually talk about, for every
one new person they do end up hiring,if there are exceptions made, there
have to be four equivalent terminationsto balance that out so that they can
continue to meet their goal of reducingthe size of the actual federal workforce.
And they focused on what iscalled a probationary employee.
(02:25):
So somebody who's in either thefirst year or two of their job
with the federal government.
Or, who are in a new position,have accepted a new position—that
constitutes a resetting of the clock asa probationary employee—and therefore,
they don't have some of the protectionsthat other civil servants have.
Two hundred thousand potentialprobationary employees in the
(02:48):
government could also be terminated.
And then the final thing is there issome reclassification of the employment
classification itself for employees, whichis called Schedule F. So the reinstatement
of what's called Schedule F could changeup to 50,000 or more employees from civil
(03:11):
servant with the protections to at-willemployees, so they would also be subject
to potential termination, very muchas in the private sector right now, so
they wouldn't have the same protections.
So the effort is massive, it hastentacles, far-reaching tentacles,
and it's going to have a hugeimpact on the federal workforce.
(03:32):
It's going to have potentialimplications in the private sector,
certainly with government contractors.
And I think leaders across the boardhave to figure out how to manage
all this change to the organization.
Because, of course, whenever youhave this kind of massive change,
you create some risk, as well.
Steve Odland (03:50):
OK, so you mentioned Schedule F. Can you just tell
us a little bit what that means?
What is Schedule F?
Diana Scott (03:59):
Schedule F is really a reclassification of career positions,
and they're reclassified to what arecalled policy-influencing positions,
which really strips them of all theprotections for career civil servants.
In essence, it could be, they'retalking 50,000, up to 100,000
employees could be reclassified, andthat makes them at-will employees,
(04:22):
so it's much easier to let them go.
They don't have all those protections.
Steve Odland (04:27):
Yeah.
And just a little more context setting.
I think there are about what, 3 millionfederal employees, not including active
military or the Postal Service, right?
Diana Scott (04:37):
Correct.
Steve Odland (04:38):
And you have about a third of those that are unionized.
So they have different protectionsthan the non-unionized members.
And so DOGE is working around allof those different rules, but the
point is, there's a lot of change.
There's a lot of people thatare coming up voluntarily.
You mentioned 100,000.
That's a lot of people.
Diana Scott (04:58):
It's a lot.
Steve Odland (04:59):
Yeah.
And they're trying to get outat least another 100,000 more,
which may not be quite as easy,or it may be more contentious.
So all of this creates stressin the federal workforce and
these agencies and so forth.
So if you were advising the leadersin these agencies, what would you be
(05:22):
telling, how would you be advising them tohandle all this change with their people?
Diana Scott (05:27):
First, the leaders really are responsible for understanding what
the potential income impacts and outcomesare, because none of this is certain.
They're working with alot of moving pieces.
So I think scenario planning is going tobe very important, contingency planning.
Those of us in the private sector dothis all the time around business.
(05:48):
Do some modeling, really understand andanticipate what the potential actions
might be, what the take-up rates would be,and what the potential outcomes would be.
And in the course of that, you reallyneed to think about some things, like
if you're trying to manage large-scaleemployee departures, you have to think
about, how is that going to impact ourability to serve our customers, which
(06:13):
are largely all of us, the taxpayers.
There are many agenciesproviding all sorts of services.
So how do you do that byminimizing the disruption?
And then you also have to thinkabout, as people depart, especially
if they're taking people upon the "fork in the road" offer.
They're saying, "Yes, I will voluntarilyresign and move to the private sector
(06:34):
or find something else to do." Youhave a lot of knowledge exiting
your organizations very quickly.
That makes it very challenging tomanage that knowledge transfer, to
make sure that there's continuity.
And as new political appointees come in totake some of these positions, it can make
it very challenging for them, as well.
So all of that is scenario planning,which I think is really important.
(06:58):
We call it workforce planning in theprivate sector, and that's exactly what
leaders really do need to focus on.
At the same time, they also have torecognize, though, that to your point,
change brings a lot of anxiety, iterodes trust, and so they need
to think about how to manage thisprocess with their people, as well,
and build confidence, build trust.
(07:20):
And the ways that you really cando that as a leader are focusing
on things like communication.
Open communication, where you'resharing information, you're sharing the
strategies, you're talking to your directreports and other leaders so that they
can feel like they understand what'sgoing, and so that you really create some
alignment from the top as the messagesthen get pushed down in the organization.
(07:44):
Because that's going to help withsome of this anxiety and erosion
of trust that is naturally going tooccur whenever you have this kind of
massive change in an organization.
Steve Odland (07:54):
Yeah, and this scenario planning is important.
You mentioned it's both scenario andcontingency planning, but they don't
really know where the people are goingto exit, and then they're talking
about downsizing the Department ofEducation, maybe some other departments.
If you have 100,000 people all leavefrom the IRS, for instance, they
(08:18):
wouldn't have any way to collectthe revenue or to advise taxpayers.
It could be devastating toany individual department.
And so I think this is whatyou mean by that they've got to
scenario plan here because youdon't know what's going to happen.
Diana Scott (08:34):
And that's what makes this so difficult.
And clearly, it's happeningrapid-fire, which makes it difficult
to even anticipate, to your point.
It's a tough situation.
It's incredibly disruptive right now.
Steve Odland (08:49):
And if you're in the private sector, I think you
maybe not, but I think you have anexpectation mostly that sands shift
and it's a little riskier, but.
It used to be that you go into thegovernment for more security, and
you trade off a little bit on thesalary, or maybe a lot, in some
cases, on the salary, but you haveprotection through retirement.
(09:13):
And so this kind of throws that wholemodel, this trust model, up in the air.
Diana Scott (09:20):
Exactly.
It's turned on its head.
Yes, people in the governmentare there very often because
they're very service-oriented.
A lot of the government employeesare veterans, former military,
so it's a natural progression forthem to move from the military as
vets into being civil servants.
(09:41):
And it reflects theirdesire to continue to serve.
But there is also this notion ofsome stability, and there were
a lot of protections in place,for many of these civil servants.
And some of them, with reclassifyingsome of these positions, with eliminating
agencies, some of those protectionsseem to be going out the window, which
(10:01):
is what's eroding the trust so muchand making it difficult for leaders to
actually manage through this processand ensure that, not only can they
try to anticipate what's going tohappen, but also plan to, continue to
deliver the services and the support.
The IRS example that youbrought up, that's a tough one.
How do they continue to processtax returns, process rebates?
(10:25):
How does that all continue to happenwhen a potentially massive part of your
workforce is exiting the organization?
Steve Odland (10:33):
Yeah.
And we should just point out,Diana, The Conference Board
is completely nonpartisan.
We're nonpolitical.
We're not taking a point ofview on whether this is the
right or the wrong thing to do.
We're just trying to talk about theissues of managing this change and
what's going on in the workforce.
Diana Scott (10:54):
Exactly.
Steve Odland (10:54):
Yeah.
So anybody who hears anything thatsounds at remotely political.
We're not intending that.
But you have to come back causethis is a new administration,
and it's a whole new deal here.
It's a whole new day, andnobody's ever seen a DOGE before.
And there's a lot of court challengesto what they're doing cause nobody
(11:16):
knows for certain what's happening.
So all of this creates thisstress in the workforce.
But it also carries over.
It's not just an agency or a couple ofpeople in the government or whatever.
It impacts communities.
It impacts friends and impacts family.
(11:36):
And so the stress carries throughwell beyond even the potentially
impacted people in the government.
Diana Scott (11:44):
I think the anxiety around the change is normal.
The uncertainty that it creates, thetrust that it erodes, that's normal
whenever a change like this occurs.
And I think the key is here, you needto, in these situations, as a leader,
really balance what the employee needsare and the impact on your communities
(12:05):
with what's in the best interest, inthis case, of the administration and what
the administration and the governmentand the leaders of the administration
are trying to accomplish, which is toreduce expenses, reduce the size of the
workforce, to streamline the government.
So it's a balancing act, and I think, inany situation like that, to the point you
(12:25):
made, we're not commenting politically.
We're just trying to say, in any situationlike this, it is a balancing act.
You're trying to look at, what is theopportunity that we're trying to address?
And there's a hugeopportunity to streamline.
I think we would all agree, a hugeopportunity to streamline government.
That's the goal.
But the risks is that you managethe disruption of established
(12:48):
systems that are in place.
That can erode trust and also affectability to deliver services that
are really important to the Americanpublic and the constituencies that
access these various agencies.
So you've got to find theway to navigate through that.
And I think there are toolsthat people have as leaders.
(13:10):
And then, tools that you can even provideand remind your frontline managers of,
as well So I think that's partly whatwe're trying to provide some support on.
Steve Odland (13:21):
Yeah, we're talking about the effects of DOGE and
some of the cuts in government.
We're going to take a shortbreak and be right back.
Welcome back to C-Suite Perspectives.
I'm your host, Steve Odland, from TheConference Board, and I'm joined today
by Diana Scott, the head of the US HumanCapital Center at The Conference Board.
(13:42):
OK, so Diana, you've gotall this change going on.
You're an expert in change management.
Now, a lot of people may not be familiarwith that term, and it is a fancy HR
term, but it means that you can'tjust throw the switch on these things.
You've got to manage this through theprocess, very deliberately talk about all
(14:04):
the change management aspects of this.
Diana Scott (14:07):
I talked about scenario planning for the top of the house.
That really is part of that changeplanning that needs to happen.
You need to anticipate what might happenand talk about, "How am I going to
address it if any of these particularcases emerge?" So that's at the top
of the house, but I think there arereal things that leaders at all levels
(14:31):
of the organization need to focus on.
And it starts withcommunication and transparency.
We have so much research thatsays if change is occurring—and
change naturally creates anxiety.
Many people are change resistant.
It's hard.
It's hard for a populationto deal with change.
(14:51):
But if you are transparent aboutit, and you explain the context,
our research shows that mostemployees will say, "OK, I get it.
I understand why you're doing this.
You're being very honest and transparentabout how this might impact me.
And you're also beginning to talkabout some tools of how I might react
differently and think about this in termsof how it impacts me and what I can do
(15:16):
to help myself navigate through this."
Steve Odland (15:19):
Yeah.
And that's typically thought of as itrelates to the impacted people, but
it's the people who aren't impacted,they're behind, who have to pick up all
the extra work, who have to deal withtheir colleagues and friends leaving.
So there's a huge amount of change effortrequired with the residual workforce.
Diana Scott (15:38):
Absolutely.
So you have the peoplewho are directly impacted.
Then you have the people who arestaying behind, and they can be angry.
Again, if they don't understand thecontext and, "Why are you being mean
to my friend who sits next to be inthe next cubicle?" they're likely
to become disengaged and not workas hard and maybe phone things in.
(15:59):
And that happens across the board.
This is not just in the scenario we'retalking about now, with the government.
This is any time you have amajor change in an organization.
You have to think about all thedifferent stakeholders that are
going to be impacted by this change.
So in that context, you have the personthat's directly impacted, and they're
going to be exiting the organization.
You have the people that are left behind.
(16:20):
You also have to think about yourcustomer, whoever that might be.
So in this case, you have to thinkabout how are we going to message
this and make sure that we're stillable to deliver service and support
to our end user, to our customer.
What does that look like?
And if there are going to bedelays or changes, again, being
(16:41):
as transparent as you can aboutsaying, "This is what's happening.
This is why we're doing it.
Our goal long term is to serve you better.
There may be some disruption in themeantime, and here's why, and here's how
you can address it if you have thingsthat are falling through the cracks
from your perspective as an end user."All of those audiences are important.
Steve Odland (17:01):
Yeah, but you have to do this deliberately.
You really have to say, OK, all thesepeople are going to be affected, and
even if everybody completely understands,everybody's an adult, everybody
completely understands that thereis waste, there's waste everywhere.
Nothing's ever perfect.
And even if you voted for it, you maynot—it doesn't become real until your
(17:24):
job is affected or your neighbor's jobis affected or your family member's job.
So this is where therubber meets the road.
And even if somebody is completelyprepared and supportive of it from
a strategy standpoint, it can bevery disruptive and therefore needs
to be dealt with really carefully.
Diana Scott (17:42):
Absolutely.
And I think the role of, we talka lot about emotional intelligence.
It's a term that people throw out.
But that is a real skill and ability.
It's really about the ability to behonest, transparent, but also show empathy
(18:03):
to the individual, the stakeholder,and how this is impacting them.
And as leaders, if you can show thatempathy and really be thoughtful and
responsive and a good listener, thatgoes a long way to helping move people
along to understanding and acceptance.
It's like the seven stages of griefthat people go through, whether
(18:24):
you're actually directly impacted,or your friend is being impacted,
or your community is being impacted.
Having the context, having transparentconversations, understanding why this is
important and necessary, and understandingand a sign of empathy and support for
helping people navigate through that,however it's impacting them, goes a
(18:46):
long way to bringing people on board.
And ultimately, they come out atthe other end and say, "OK, it
wasn't great, but I felt like Iwas supported and I was heard."
Steve Odland (19:00):
Ultimately, it's how you make people feel through
the process and after the process.
Now, I mentioned earlier that youwere the CHRO of several large
organizations, led this stuff.
I've often felt that these kind ofchanges are, while they're obviously
hard on the people who are impacted,but it's really stressful and hard on
the human resources organization, in anycompany, or in this case, the government.
(19:23):
And so the leaders need to also thinkabout the stress on that organization
and helping that organization becausehuman resource people are people, too.
Diana Scott (19:34):
Yes.
Some people think we are.
Not everybody thinks we are, and withthe advent of AI, maybe we aren't.
But you make a really good point.
I think the well-being of everybodyinvolved is absolutely something
that needs to be focused on.
The well-being of the folks who are makingthe changes, who are having to carry
(19:55):
out the, the directives and the orders.
It's hard on them, too, becausethey are part of that community.
It's very stressful on leaders.
We really need to think about how doyou support the leaders through this?
Because they are human.
They feel bad about what's happening.
In my experience, and I've livedthrough multiple reductions in force
(20:17):
at multiple different companies, it'sreally difficult to get through it.
But almost in every case, if it's donewell, you come out at the other end with
your employees that have been directlyimpacted feeling supported, and usually
finding new life, new careers, new careerpaths, new opportunities for themselves.
(20:40):
And they walk away from it thinking thatit actually was a blessing in disguise.
If you do it right.
And even the people internally, ifyou do it right, they will say, "Wow,
the culture of our organization reallyhandled this well. And even though it
was difficult, and there were difficultchoices that had to be made, it was
handled well, and therefore I'm proudto be part of this organization."
Steve Odland (21:04):
And if there's open communication and transparency, as
you said, then it can build trust.
But if not, it can erode trust anddestroy culture through this process.
Diana Scott (21:14):
Exactly.
Exactly.
Steve Odland (21:16):
Now, a lot has been made about shortages in the private sector.
And so there's a lot of extra people here.
And oh, we'll just, we'll just movethem over to the private sector.
That kind of works at 100,000 feet.
But when you get down to it, peoplewho are in the private sector may
be there for different reasons.
They may have different skills, and theopen positions or the requirements have
(21:41):
different skill set needs and so forth.
So if you take, for instance, aforest ranger out of a national
park, that's not going to actuallyjust translate immediately to a
company that needs an accountant.
There are big ramifications here,whereas on paper, it looks really simple.
Big ramifications, and this isfar more difficult than it looks.
Diana Scott (22:02):
It is, but there are opportunities for the private sector.
If you look at a couple ofdifferent industries, there are
a lot of federal workers who areworking in health care right now.
We have huge shortages in health care,so there's an opportunity for the
health care industry to potentiallypick up some very highly experienced,
technically trained individualscoming out of the federal workforce.
(22:27):
Similarly, there are many peoplewho have technical skills in
technology and the technology fields.
Again, there are shortages ofpeople who know how to code and
know how to do—frontline workers,individual contributors—opportunity
for those folks to perhaps bepicked up in those industries.
(22:49):
And the other opportunity is for managers.
If they are trained to do this, they canactually really help, those frontline
managers can really help encourage theemployees that are potentially going to
be impacted to prepare themselves forthis change, to think about their skills.
(23:10):
where they fit, and more importantly,what they would like to do.
It isn't just about, "Here, you needto find a job." It's an opportunity,
when these kinds of changes happen, toreally evaluate what's important for you
and how would you like to potentiallythink about a career path going forward,
especially if it's in the private sector.
Where would I fit?
(23:31):
And there are lots of tools to do that.
So again, leaders, frontline managerscan be very supportive in encouraging
their employees to take more controlover their lives and think this
through, make sure they're gettingtheir resumes prepared, et cetera.
Steve Odland (23:46):
But this is a good opportunity for business leaders
to step up, as well, and to partnerwith the public sector, and to
provide training programs, deliberaterecruiting and training programs, to
take certain people and develop skillsets, but be deliberate about it.
Diana Scott (24:03):
Exactly.
And we have some majorshortages for certain skill sets.
Like I said, health care,there's a lot of the technology.
Those kinds of capabilities, ifyou are able to, again, translate.
What are those capabilities andcompetencies actually translate
into in the private sector with,sometimes, minimal training
(24:26):
and upskilling and reskilling?
You can actually make thattransition work really well.
So it is an opportunityfor the private sector.
Steve Odland (24:33):
Last thing is there are also places that people can
go, professional networks andso forth, to help through this.
Just talk a little bitabout that to wrap up.
Diana Scott (24:43):
They can look at their own networks, certainly.
They can look to different organizationsthat are in their specific career
fields and look at those networkingorganizations . Whether you're in finance
or health care, there are multipleorganizations that can support there.
And networking becomes reallyimportant in this scenario.
(25:04):
It allows you to explore opportunities.
It allows you to talk to otherindividuals who might be doing
similar work, but perhaps not in thegovernment, perhaps in the private
sector, and understand more of yourself.
Like, "How do my skills actuallytranslate into those kinds of jobs?"
So networking is really important.
(25:25):
I think it's also important, though,that people really step back and
evaluate what their own goals are.
This allows them to take a little bitof control back, and they have to say,
"OK, what's important to me? What aboutmy work and my home are important to
me?" So, that work-life performance.
Really, they take controlover what they're looking for.
(25:48):
And they also need to think about,what are their financial goals?
Where do they stand today?
And what kind offlexibility might they have?
Where are they in their career?
Are they close to retirement or not?
Are they early in career or not?
Do they want to potentiallymake a pivot in their career?
Is it an opportunity to go back toschool and learn some new skills, or
go through some sort of certificationprocess to increase their skills?
(26:12):
That kind of planning is really important,and people should not feel like they're
the victim of this happening to them,but instead see it as an opportunity
to really think about, "How do Itake more control over my own career
and seize this as an opportunity?"
Steve Odland (26:30):
Yeah.
So change is hard, and change is upon us.
And I think what I hear yousaying is, everybody needs to be
deliberate about it, compassionateabout it, and help us through.
Diana Scott (26:41):
Absolutely.
Steve Odland (26:42):
Yeah.
Diana Scott, thanks forbeing with us today.
Diana Scott (26:46):
My pleasure.
Steve Odland (26:47):
And thanks to all of you for listening to C-Suite Perspectives.
I'm Steve Odland, and this series has beenbrought to you by The Conference Board.
Welcome to C-Suite Perspectives, a signature
(00:02):
series by The Conference Board.
I'm Steve Odland from The ConferenceBoard and the host of this podcast series.
And in today's conversation, we'regoing to discuss the implications of
the new administration's policy onthe federal and private workforces.
Joining me today is Diana Scott,the head of the US Human Capital
Center at The Conference Board.
(00:24):
Diana.
Welcome.
Diana Scott (00:25):
Thank you for having me, Steve.
Steve Odland (00:27):
So Diana, you've been CHRO in several very large companies and
been part of a lot of change over time.
But this new effort by theadministration is really unique.
This is the Department ofGovernment Efficiency, or DOGE,
which is led by Elon Musk.
And they're trying to take costsout of the government, or waste.
(00:51):
As part of that, they're impacting people.
Talk about what's going on now.
Diana Scott (00:55):
One of the objectives of DOGE is to actually reduce the
size of the federal workforce.
So that's a massive effort, and DOGEhas been focused on a number of
different areas, and there have been manyexecutive orders and proclamations that
are actually pushing this work forward.
So if I can just go over some ofthem, because some of them are huge.
(01:16):
So really, they're looking to potentiallyeliminate or downsize a lot of, or
reorganize, some of the agencies.
So that's number one.
They're looking to relocatefunctions or entire agencies.
So imagine the massivework involved in that.
They've also, many of you haveheard about " a fork in the road,"
(01:38):
the "fork in the road" memo.
So they're providing incentives tofederal employees to actually resign,
which is under legal scrutiny, butstill, that was a major effort.
And at this point, it seems likeover 100,000 employees have actually
raised their hand and said they'reinterested, or they've actually
signed up for this program to resignand get some compensation in return.
(02:01):
They have initiated a hiring freeze, andthere's actually talk about, for every
one new person they do end up hiring,if there are exceptions made, there
have to be four equivalent terminationsto balance that out so that they can
continue to meet their goal of reducingthe size of the actual federal workforce.
And they focused on what iscalled a probationary employee.
(02:25):
So somebody who's in either thefirst year or two of their job
with the federal government.
Or, who are in a new position,have accepted a new position—that
constitutes a resetting of the clock asa probationary employee—and therefore,
they don't have some of the protectionsthat other civil servants have.
Two hundred thousand potentialprobationary employees in the
(02:48):
government could also be terminated.
And then the final thing is there issome reclassification of the employment
classification itself for employees, whichis called Schedule F. So the reinstatement
of what's called Schedule F could changeup to 50,000 or more employees from civil
(03:11):
servant with the protections to at-willemployees, so they would also be subject
to potential termination, very muchas in the private sector right now, so
they wouldn't have the same protections.
So the effort is massive, it hastentacles, far-reaching tentacles,
and it's going to have a hugeimpact on the federal workforce.
(03:32):
It's going to have potentialimplications in the private sector,
certainly with government contractors.
And I think leaders across the boardhave to figure out how to manage
all this change to the organization.
Because, of course, whenever youhave this kind of massive change,
you create some risk, as well.
Steve Odland (03:50):
OK, so you mentioned Schedule F. Can you just tell
us a little bit what that means?
What is Schedule F?
Diana Scott (03:59):
Schedule F is really a reclassification of career positions,
and they're reclassified to what arecalled policy-influencing positions,
which really strips them of all theprotections for career civil servants.
In essence, it could be, they'retalking 50,000, up to 100,000
employees could be reclassified, andthat makes them at-will employees,
(04:22):
so it's much easier to let them go.
They don't have all those protections.
Steve Odland (04:27):
Yeah.
And just a little more context setting.
I think there are about what, 3 millionfederal employees, not including active
military or the Postal Service, right?
Diana Scott (04:37):
Correct.
Steve Odland (04:38):
And you have about a third of those that are unionized.
So they have different protectionsthan the non-unionized members.
And so DOGE is working around allof those different rules, but the
point is, there's a lot of change.
There's a lot of people thatare coming up voluntarily.
You mentioned 100,000.
That's a lot of people.
Diana Scott (04:58):
It's a lot.
Steve Odland (04:59):
Yeah.
And they're trying to get outat least another 100,000 more,
which may not be quite as easy,or it may be more contentious.
So all of this creates stressin the federal workforce and
these agencies and so forth.
So if you were advising the leadersin these agencies, what would you be
(05:22):
telling, how would you be advising them tohandle all this change with their people?
Diana Scott (05:27):
First, the leaders really are responsible for understanding what
the potential income impacts and outcomesare, because none of this is certain.
They're working with alot of moving pieces.
So I think scenario planning is going tobe very important, contingency planning.
Those of us in the private sector dothis all the time around business.
(05:48):
Do some modeling, really understand andanticipate what the potential actions
might be, what the take-up rates would be,and what the potential outcomes would be.
And in the course of that, you reallyneed to think about some things, like
if you're trying to manage large-scaleemployee departures, you have to think
about, how is that going to impact ourability to serve our customers, which
(06:13):
are largely all of us, the taxpayers.
There are many agenciesproviding all sorts of services.
So how do you do that byminimizing the disruption?
And then you also have to thinkabout, as people depart, especially
if they're taking people upon the "fork in the road" offer.
They're saying, "Yes, I will voluntarilyresign and move to the private sector
(06:34):
or find something else to do." Youhave a lot of knowledge exiting
your organizations very quickly.
That makes it very challenging tomanage that knowledge transfer, to
make sure that there's continuity.
And as new political appointees come in totake some of these positions, it can make
it very challenging for them, as well.
So all of that is scenario planning,which I think is really important.
(06:58):
We call it workforce planning in theprivate sector, and that's exactly what
leaders really do need to focus on.
At the same time, they also have torecognize, though, that to your point,
change brings a lot of anxiety, iterodes trust, and so they need
to think about how to manage thisprocess with their people, as well,
and build confidence, build trust.
(07:20):
And the ways that you really cando that as a leader are focusing
on things like communication.
Open communication, where you'resharing information, you're sharing the
strategies, you're talking to your directreports and other leaders so that they
can feel like they understand what'sgoing, and so that you really create some
alignment from the top as the messagesthen get pushed down in the organization.
(07:44):
Because that's going to help withsome of this anxiety and erosion
of trust that is naturally going tooccur whenever you have this kind of
massive change in an organization.
Steve Odland (07:54):
Yeah, and this scenario planning is important.
You mentioned it's both scenario andcontingency planning, but they don't
really know where the people are goingto exit, and then they're talking
about downsizing the Department ofEducation, maybe some other departments.
If you have 100,000 people all leavefrom the IRS, for instance, they
(08:18):
wouldn't have any way to collectthe revenue or to advise taxpayers.
It could be devastating toany individual department.
And so I think this is whatyou mean by that they've got to
scenario plan here because youdon't know what's going to happen.
Diana Scott (08:34):
And that's what makes this so difficult.
And clearly, it's happeningrapid-fire, which makes it difficult
to even anticipate, to your point.
It's a tough situation.
It's incredibly disruptive right now.
Steve Odland (08:49):
And if you're in the private sector, I think you
maybe not, but I think you have anexpectation mostly that sands shift
and it's a little riskier, but.
It used to be that you go into thegovernment for more security, and
you trade off a little bit on thesalary, or maybe a lot, in some
cases, on the salary, but you haveprotection through retirement.
(09:13):
And so this kind of throws that wholemodel, this trust model, up in the air.
Diana Scott (09:20):
Exactly.
It's turned on its head.
Yes, people in the governmentare there very often because
they're very service-oriented.
A lot of the government employeesare veterans, former military,
so it's a natural progression forthem to move from the military as
vets into being civil servants.
(09:41):
And it reflects theirdesire to continue to serve.
But there is also this notion ofsome stability, and there were
a lot of protections in place,for many of these civil servants.
And some of them, with reclassifyingsome of these positions, with eliminating
agencies, some of those protectionsseem to be going out the window, which
(10:01):
is what's eroding the trust so muchand making it difficult for leaders to
actually manage through this processand ensure that, not only can they
try to anticipate what's going tohappen, but also plan to, continue to
deliver the services and the support.
The IRS example that youbrought up, that's a tough one.
How do they continue to processtax returns, process rebates?
(10:25):
How does that all continue to happenwhen a potentially massive part of your
workforce is exiting the organization?
Steve Odland (10:33):
Yeah.
And we should just point out,Diana, The Conference Board
is completely nonpartisan.
We're nonpolitical.
We're not taking a point ofview on whether this is the
right or the wrong thing to do.
We're just trying to talk about theissues of managing this change and
what's going on in the workforce.
Diana Scott (10:54):
Exactly.
Steve Odland (10:54):
Yeah.
So anybody who hears anything thatsounds at remotely political.
We're not intending that.
But you have to come back causethis is a new administration,
and it's a whole new deal here.
It's a whole new day, andnobody's ever seen a DOGE before.
And there's a lot of court challengesto what they're doing cause nobody
(11:16):
knows for certain what's happening.
So all of this creates thisstress in the workforce.
But it also carries over.
It's not just an agency or a couple ofpeople in the government or whatever.
It impacts communities.
It impacts friends and impacts family.
(11:36):
And so the stress carries throughwell beyond even the potentially
impacted people in the government.
Diana Scott (11:44):
I think the anxiety around the change is normal.
The uncertainty that it creates, thetrust that it erodes, that's normal
whenever a change like this occurs.
And I think the key is here, you needto, in these situations, as a leader,
really balance what the employee needsare and the impact on your communities
(12:05):
with what's in the best interest, inthis case, of the administration and what
the administration and the governmentand the leaders of the administration
are trying to accomplish, which is toreduce expenses, reduce the size of the
workforce, to streamline the government.
So it's a balancing act, and I think, inany situation like that, to the point you
(12:25):
made, we're not commenting politically.
We're just trying to say, in any situationlike this, it is a balancing act.
You're trying to look at, what is theopportunity that we're trying to address?
And there's a hugeopportunity to streamline.
I think we would all agree, a hugeopportunity to streamline government.
That's the goal.
But the risks is that you managethe disruption of established
(12:48):
systems that are in place.
That can erode trust and also affectability to deliver services that
are really important to the Americanpublic and the constituencies that
access these various agencies.
So you've got to find theway to navigate through that.
And I think there are toolsthat people have as leaders.
(13:10):
And then, tools that you can even provideand remind your frontline managers of,
as well So I think that's partly whatwe're trying to provide some support on.
Steve Odland (13:21):
Yeah, we're talking about the effects of DOGE and
some of the cuts in government.
We're going to take a shortbreak and be right back.
Welcome back to C-Suite Perspectives.
I'm your host, Steve Odland, from TheConference Board, and I'm joined today
by Diana Scott, the head of the US HumanCapital Center at The Conference Board.
(13:42):
OK, so Diana, you've gotall this change going on.
You're an expert in change management.
Now, a lot of people may not be familiarwith that term, and it is a fancy HR
term, but it means that you can'tjust throw the switch on these things.
You've got to manage this through theprocess, very deliberately talk about all
(14:04):
the change management aspects of this.
Diana Scott (14:07):
I talked about scenario planning for the top of the house.
That really is part of that changeplanning that needs to happen.
You need to anticipate what might happenand talk about, "How am I going to
address it if any of these particularcases emerge?" So that's at the top
of the house, but I think there arereal things that leaders at all levels
(14:31):
of the organization need to focus on.
And it starts withcommunication and transparency.
We have so much research thatsays if change is occurring—and
change naturally creates anxiety.
Many people are change resistant.
It's hard.
It's hard for a populationto deal with change.
(14:51):
But if you are transparent aboutit, and you explain the context,
our research shows that mostemployees will say, "OK, I get it.
I understand why you're doing this.
You're being very honest and transparentabout how this might impact me.
And you're also beginning to talkabout some tools of how I might react
differently and think about this in termsof how it impacts me and what I can do
(15:16):
to help myself navigate through this."
Steve Odland (15:19):
Yeah.
And that's typically thought of as itrelates to the impacted people, but
it's the people who aren't impacted,they're behind, who have to pick up all
the extra work, who have to deal withtheir colleagues and friends leaving.
So there's a huge amount of change effortrequired with the residual workforce.
Diana Scott (15:38):
Absolutely.
So you have the peoplewho are directly impacted.
Then you have the people who arestaying behind, and they can be angry.
Again, if they don't understand thecontext and, "Why are you being mean
to my friend who sits next to be inthe next cubicle?" they're likely
to become disengaged and not workas hard and maybe phone things in.
(15:59):
And that happens across the board.
This is not just in the scenario we'retalking about now, with the government.
This is any time you have amajor change in an organization.
You have to think about all thedifferent stakeholders that are
going to be impacted by this change.
So in that context, you have the personthat's directly impacted, and they're
going to be exiting the organization.
You have the people that are left behind.
(16:20):
You also have to think about yourcustomer, whoever that might be.
So in this case, you have to thinkabout how are we going to message
this and make sure that we're stillable to deliver service and support
to our end user, to our customer.
What does that look like?
And if there are going to bedelays or changes, again, being
(16:41):
as transparent as you can aboutsaying, "This is what's happening.
This is why we're doing it.
Our goal long term is to serve you better.
There may be some disruption in themeantime, and here's why, and here's how
you can address it if you have thingsthat are falling through the cracks
from your perspective as an end user."All of those audiences are important.
Steve Odland (17:01):
Yeah, but you have to do this deliberately.
You really have to say, OK, all thesepeople are going to be affected, and
even if everybody completely understands,everybody's an adult, everybody
completely understands that thereis waste, there's waste everywhere.
Nothing's ever perfect.
And even if you voted for it, you maynot—it doesn't become real until your
(17:24):
job is affected or your neighbor's jobis affected or your family member's job.
So this is where therubber meets the road.
And even if somebody is completelyprepared and supportive of it from
a strategy standpoint, it can bevery disruptive and therefore needs
to be dealt with really carefully.
Diana Scott (17:42):
Absolutely.
And I think the role of, we talka lot about emotional intelligence.
It's a term that people throw out.
But that is a real skill and ability.
It's really about the ability to behonest, transparent, but also show empathy
(18:03):
to the individual, the stakeholder,and how this is impacting them.
And as leaders, if you can show thatempathy and really be thoughtful and
responsive and a good listener, thatgoes a long way to helping move people
along to understanding and acceptance.
It's like the seven stages of griefthat people go through, whether
(18:24):
you're actually directly impacted,or your friend is being impacted,
or your community is being impacted.
Having the context, having transparentconversations, understanding why this is
important and necessary, and understandingand a sign of empathy and support for
helping people navigate through that,however it's impacting them, goes a
(18:46):
long way to bringing people on board.
And ultimately, they come out atthe other end and say, "OK, it
wasn't great, but I felt like Iwas supported and I was heard."
Steve Odland (19:00):
Ultimately, it's how you make people feel through
the process and after the process.
Now, I mentioned earlier that youwere the CHRO of several large
organizations, led this stuff.
I've often felt that these kind ofchanges are, while they're obviously
hard on the people who are impacted,but it's really stressful and hard on
the human resources organization, in anycompany, or in this case, the government.
(19:23):
And so the leaders need to also thinkabout the stress on that organization
and helping that organization becausehuman resource people are people, too.
Diana Scott (19:34):
Yes.
Some people think we are.
Not everybody thinks we are, and withthe advent of AI, maybe we aren't.
But you make a really good point.
I think the well-being of everybodyinvolved is absolutely something
that needs to be focused on.
The well-being of the folks who are makingthe changes, who are having to carry
(19:55):
out the, the directives and the orders.
It's hard on them, too, becausethey are part of that community.
It's very stressful on leaders.
We really need to think about how doyou support the leaders through this?
Because they are human.
They feel bad about what's happening.
In my experience, and I've livedthrough multiple reductions in force
(20:17):
at multiple different companies, it'sreally difficult to get through it.
But almost in every case, if it's donewell, you come out at the other end with
your employees that have been directlyimpacted feeling supported, and usually
finding new life, new careers, new careerpaths, new opportunities for themselves.
(20:40):
And they walk away from it thinking thatit actually was a blessing in disguise.
If you do it right.
And even the people internally, ifyou do it right, they will say, "Wow,
the culture of our organization reallyhandled this well. And even though it
was difficult, and there were difficultchoices that had to be made, it was
handled well, and therefore I'm proudto be part of this organization."
Steve Odland (21:04):
And if there's open communication and transparency, as
you said, then it can build trust.
But if not, it can erode trust anddestroy culture through this process.
Diana Scott (21:14):
Exactly.
Exactly.
Steve Odland (21:16):
Now, a lot has been made about shortages in the private sector.
And so there's a lot of extra people here.
And oh, we'll just, we'll just movethem over to the private sector.
That kind of works at 100,000 feet.
But when you get down to it, peoplewho are in the private sector may
be there for different reasons.
They may have different skills, and theopen positions or the requirements have
(21:41):
different skill set needs and so forth.
So if you take, for instance, aforest ranger out of a national
park, that's not going to actuallyjust translate immediately to a
company that needs an accountant.
There are big ramifications here,whereas on paper, it looks really simple.
Big ramifications, and this isfar more difficult than it looks.
Diana Scott (22:02):
It is, but there are opportunities for the private sector.
If you look at a couple ofdifferent industries, there are
a lot of federal workers who areworking in health care right now.
We have huge shortages in health care,so there's an opportunity for the
health care industry to potentiallypick up some very highly experienced,
technically trained individualscoming out of the federal workforce.
(22:27):
Similarly, there are many peoplewho have technical skills in
technology and the technology fields.
Again, there are shortages ofpeople who know how to code and
know how to do—frontline workers,individual contributors—opportunity
for those folks to perhaps bepicked up in those industries.
(22:49):
And the other opportunity is for managers.
If they are trained to do this, they canactually really help, those frontline
managers can really help encourage theemployees that are potentially going to
be impacted to prepare themselves forthis change, to think about their skills.
(23:10):
where they fit, and more importantly,what they would like to do.
It isn't just about, "Here, you needto find a job." It's an opportunity,
when these kinds of changes happen, toreally evaluate what's important for you
and how would you like to potentiallythink about a career path going forward,
especially if it's in the private sector.
Where would I fit?
(23:31):
And there are lots of tools to do that.
So again, leaders, frontline managerscan be very supportive in encouraging
their employees to take more controlover their lives and think this
through, make sure they're gettingtheir resumes prepared, et cetera.
Steve Odland (23:46):
But this is a good opportunity for business leaders
to step up, as well, and to partnerwith the public sector, and to
provide training programs, deliberaterecruiting and training programs, to
take certain people and develop skillsets, but be deliberate about it.
Diana Scott (24:03):
Exactly.
And we have some majorshortages for certain skill sets.
Like I said, health care,there's a lot of the technology.
Those kinds of capabilities, ifyou are able to, again, translate.
What are those capabilities andcompetencies actually translate
into in the private sector with,sometimes, minimal training
(24:26):
and upskilling and reskilling?
You can actually make thattransition work really well.
So it is an opportunityfor the private sector.
Steve Odland (24:33):
Last thing is there are also places that people can
go, professional networks andso forth, to help through this.
Just talk a little bitabout that to wrap up.
Diana Scott (24:43):
They can look at their own networks, certainly.
They can look to different organizationsthat are in their specific career
fields and look at those networkingorganizations . Whether you're in finance
or health care, there are multipleorganizations that can support there.
And networking becomes reallyimportant in this scenario.
(25:04):
It allows you to explore opportunities.
It allows you to talk to otherindividuals who might be doing
similar work, but perhaps not in thegovernment, perhaps in the private
sector, and understand more of yourself.
Like, "How do my skills actuallytranslate into those kinds of jobs?"
So networking is really important.
(25:25):
I think it's also important, though,that people really step back and
evaluate what their own goals are.
This allows them to take a little bitof control back, and they have to say,
"OK, what's important to me? What aboutmy work and my home are important to
me?" So, that work-life performance.
Really, they take controlover what they're looking for.
(25:48):
And they also need to think about,what are their financial goals?
Where do they stand today?
And what kind offlexibility might they have?
Where are they in their career?
Are they close to retirement or not?
Are they early in career or not?
Do they want to potentiallymake a pivot in their career?
Is it an opportunity to go back toschool and learn some new skills, or
go through some sort of certificationprocess to increase their skills?
(26:12):
That kind of planning is really important,and people should not feel like they're
the victim of this happening to them,but instead see it as an opportunity
to really think about, "How do Itake more control over my own career
and seize this as an opportunity?"
Steve Odland (26:30):
Yeah.
So change is hard, and change is upon us.
And I think what I hear yousaying is, everybody needs to be
deliberate about it, compassionateabout it, and help us through.
Diana Scott (26:41):
Absolutely.
Steve Odland (26:42):
Yeah.
Diana Scott, thanks forbeing with us today.
Diana Scott (26:46):
My pleasure.
Steve Odland (26:47):
And thanks to all of you for listening to C-Suite Perspectives.
I'm Steve Odland, and this series has beenbrought to you by The Conference Board.
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