Inflexible Return-to-Work Policies will Hurt Public Sector Capacity

A new Romney-Manchin bill would shrink the federal hiring pool

It is often difficult to get Congress interested in its job of building government capacity. For example, the Senate failed to block Trump’s Schedule F plan for mass politicization of the federal bureaucracy for want of a single Republican sponsor. But there is an emerging bipartisan consensus emerging around…drumroll…making the federal government a less competitive employer.

Just two guy with some idea about the future of remote work; Andrew Harnik/AP.

That is not the content of the policy, but that will be the effect. I am talking about return-to-work policies. Specifically, Senators Romney and Manchin are proposing to limit telework to 40% of federal employee time, or two days a week.

I read about the new bill on my DC Metro commute. This is what the morning commute looks like. Absolute sardines. Maybe the Senators might want to talk to some federal employees about this.

I study public organizations, so the commute inspired a few few questions for those urging an end to remote work.

What is the biggest human capital problem the federal workforce faces?

Apparent from mass politicization that the Senate has ignored? It is recruitment and retention of talented employees. Strategic human capital management has been on the Government Accountability Office’s list of high-risk the government faces since 2001. Compared to the private sector, the federal workforce is old. It is also struggling to compete with private employers in recruiting younger workers. Benefits are good, but salaries have not kept up with inflation. If a lot of people who are eligible for retirement actually leave, and you cannot hire and retain their replacements, the human capital crisis becomes a catastrophe.

How did they Manchin and Romney come up with the 40% number?

The Biden administration is already pushing to put employees back in the office 50% of the time, and so Romney and Manchin just decided to up them by 10%, requiring in-person office engagement at 60% of the time.

Congrats everyone, on the “Lets Make a Deal” approach to public sector policymaking, where you win by just yelling out a higher number.¹

Has anyone talked to actual federal employees about how telework is going?

Just talking to federal employees in DC shows what a mess this would be. I chatted with a few about this topic in recent months. To be clear, these are managers, not lower level employees, and so worry a lot about keeping talent in government, even as they are compelled to be in the office a few days a week already.

One noted that return to work would severely impact their ability to recruit: when they post a position with the possibility of virtual work they receive many times the numbers of applications relative to when they post something where in-person work is required. Another noted the difficulty in getting an HR specialist who is willing to work in the DC region, even as a lower salary would allow you to recruit an talented person in places like Wisconsin or Wyoming thanks to remote work.

One federal manager I spoke with said they wished Congress could see how crucial remote work has been to retaining incredible talent who could no longer stay in-person because of circumstances like a spouse taking a new job, or family caregiving demands.

The Romney-Manchin bill does recognize that some workers have unusual life circumstances that makes remote work the only feasible option: if you are in military/law enforcement OR your spouse is. And, thats about it. Maybe the Senators could also fund a dating website that would match IT specialists with law enforcement employees, because they are killing the ability to recruit and retain such talent.

Does anyone care about the negative effects of back-to-office policies?

Federal agencies are able to broaden their hiring pool with remote work. The greater the ability to hire better people seems intuitive and straightforward benefit to the organization. On the other hand, while citing productivity as an issue, Manchin and Romney et al. have not offered public sector data showing that remote work reduces productivity. What is the work that is not getting done? Work requiring regulatory visits, national security status, or face-to-face diplomacy is still happening.

The new bill would not just limit remote work, it it also require agencies to monitor teleworking activity: “and the potential negative effects of telework on productivity, morale, security vulnerabilities, or waste, fraud or abuse.” Again, this is a Senate that has not lifted a finger to stop a wave of politicization of government, but they are want to see breakdowns of employee teleworking time? Note they only want to hear bad news about teleworking, not potential benefits. Employers are not being asked to monitor the negative effects of, two hour round trip commutes on productivity, for example.

This reads very much like a stacked deck, rather than an effort to look at the pros and cons of different approaches.

Anyway, here are some useful principles to think about the use of remote work in government.

Don’t make capacity decisions based on economic activity

While Manchin said the bill was about productivity, he also laid out another argument:

Federal workers have a unique obligation to connect with the citizens they serve, and exclusively remote work hinders this essential collaboration. Local businesses in West Virginia and across the country are also suffering from a lack of consumer traffic during work days, which is negatively impacting our local economies.

Ladies and gentlemen, let me present you with Schrödinger’s bureaucrats: they are both lazy and inefficient, and yet not doing enough to spur economic activity via shopping and lengthy lunches.

Manchin is not alone. Businesses, developers, and Democrats in DC, especially Mayor Bowser want to have more downtown traffic. But let me make the case that primary basis for public personnel decisions should be about organizational capacity and performance, not economic activity. There is a clear tradeoff between narrowing hiring pools and hiring outcomes. Sometimes, society is willing to accept those tradeoffs. For example, military veterans are given preference in federal employment hiring processes. Good government types point out that this makes it difficult to hire the strongest candidate. If we are willing to accept that tradeoff, fine. But as politicians impose more and more restrictions on hiring pools, at least be upfront that the primary purpose of their actions they are pursuing values unrelated to agency capacity or effectiveness.

Don’t make human capital decisions based on politics

On the Republican side, GOP politicians complain about the DC swamp. (They fail to mention that about 85% of federal employees live outside of the DC region). They promise to move more federal jobs to the rest of America. Trump even did so with some agency units, with disastrous results, causing major disruption and resignations. Remote work offers a much more feasible way to allow people from around America to work with the federal government. But GOP dislike of federal employees trumps their stated interest in helping rural America.

The politics of resentment casts a long shadow. When pushing another piece of legislation, the Stopping Home Office Work’s Unproductive Problems Act (SHOW UP Act - geddit? do you see where Congressional staffers are spending their time now?), Marco Rubio said: “For far too long, federal employees have enjoyed unchecked remote work at the expense of constituent services.” These cushy federal employees, with their ability to work remotely!

What the Senators won’t tell you is that much of public work is done by private contractors, who will not be subject to the same constraints. The same government favors these contractors for being more nimble, even as they load on more procedures to the federal employees who work with them.

On the one hand, politicians urge public organizations to work more like private businesses. On the other hand, they impose more demands upon the public sector. The flexibilities and resources of the private sector become the constraints of the public sector.

In a Congressional hearing on remote work, Glenn Grothman (R-Wisc.) claimed that public sector remote work “stands in stark contrast to the private sector where employees across the country have continued to show up to work in-person.” Grothman struggled to accept a recent Congressional Budget Office report that showed that telework is actually more prevalent among private employees.

The use of remote work should reflect agency demands and employee needs

If you are a federal employee and want to retain an amazing employee who no longer wants to live in DC, the capacity to do remote work helps. If you have a set of tasks that centers on knowledge work, remote work is a great tool. If you have tasks related to national security, or work directly with the public, like a TSA agent, then remote work makes less sense. The point is that there are lots of of agency and employee variation within the federal government. A one-size-fits-all approach makes little sense. Putting more procedural burdens in place to using remote work rather than trusting managers to do what is right for their agency ties their hands.

Policymakers build public personnel systems around constraining bad apples, not to enable good employees. As a result, all employees as subject to lowest-common-denominator rules designed to stop bad things from happening, even when those bad things are rare.

As it happens, an OMB memo in April 2023 laid out a more nuanced policy, or at least one which directed agencies to make their back-to-work planning centered on organizational health, performance and environment. Since that time, the messaging from both Congress and the Biden administration has become more dogmatically centered on the idea (without compelling evidence) that in-person work is clearly superior across the board.

Rely on evidence - but acknowledge evidence limitations

A legitimate Republican complaint is that the federal government should not pursue a policy of telework without more evidence. Fine. So collect that data. But some of the data that exists is dismissed by Republicans. James Comer, who chairs the House Government Oversight and Accountability Committee said “The only data we’ve seen on that is a survey of federal employees themselves, and they think it’s working great.” Employee preferences are important data if you are trying to recruit good employees! A randomized controlled trial on the effects of hybrid work published in Nature showed that it increased job satisfaction and reduced quits, while not affecting productivity. The study was of a Chinese technology firm, so it might not generalize easily to American government, but the causal evidence is consistent with the self-reports from employees that Comer is ignoring.

Other data would be easy to collect. Advertise the same job as remote and in-person, and compare the volume and quality of applications. If there is persuasive evidence that remote work broadens the hiring pool, that is fairly compelling.

But lets also be realistic on the limits of data here. You could allow an agency to run experiments with remote versus in person work at different locations, and then look at observed outcomes like turnover. That is a costly intervention, will only work for agencies with multiple comparable location, and involves a long-term outcome that politicians demanding a change now lack the patience for. You won’t be able to tell if it generalizes to other agencies that might be competing in very different labor markets, e.g. the hiring pool for the US Digital Service will look different from the DOD. It is also very difficult to measure agency or individual performance in the public sector. Private agencies pursue profitability, a single, unifying metric. Federal agencies largely pursue multiple and competing goals that are hard to measure and are typically the result of complex causal chains. The idea that there is some general, unified measure of agency or individual productivity like widgets-produced-per-hour is fantasy.

Engage in a genuine strategic review of the future of work

The pandemic was a forced natural experiment in remote work, and for some professions, like teaching, there is a clear consensus that it was less useful than being in person. But for a lot of the federal government, especially those involved in white collar knowledge jobs, it worked fine. This gives the government an opportunity to rethink the structure and nature of its work, in the same way that the private sector is doing. Doing so strategically is smart. Reflexively rejecting that opportunity is not.

I don’t pretend to have a definitive account as to what the future of public sector human capital management looks like, but in the 21st century it should at least consider the benefits of using telework to attract employees who don’t want to live in one of the most expensive metro areas in the country. There might also be costs, such as a less cohesive workforce, but lets at least engage in a balanced approach.

The Manchin-Romney bill exemplifies the willingness of Congress to wade in to micromanage agencies with clumsy constraints and outdated assumptions, while failing to modernize the public sector with new flexibilities or resources, or deal with fundamental threats to government capacity like Schedule F.

A smarter policy would give agencies discretion on the use of telework, allowing them to get better talent for less money, and provide resources for in-person meetings like retreats for team-based engagement. But currently, agencies are afraid to use funding for travel. It is a model of personnel management that is stuck in the 20th century and built around fear from political backlash rather than one designed to enable a 21st century workforce.

1. I’ve actually never seen “Lets Make a Deal” - I just assume this is how it works, or at least, how it should work.