TIGTA’s latest audit report discusses the issue of human capital at the Internal Revenue Service. Human capital consists of the skills, abilities, and contributions of the employees in an organization, and it is interconnected with key functions like hiring, training, and retention. In this day and age, any discussion of human capital in our government necessarily must also include a discussion of funding. Sure, human capital has always been an investment, but these days there is so little money to invest.
I think one of the most alarming issues identified in this report, at least from the perspective of a tax attorney, has to do with staffing. The IRS is quickly losing its most valuable employees. I don’t know if the IRS will ever be able to significantly reduce turnover with the rank and file. Phone operators and other service center employees don’t get paid much and their jobs tend to be very stressful. These just aren’t career / lifetime positions. But that’s not the primary concern when it comes to staffing. The bigger issue is the inevitable loss of managers and executives since changes in leadership can have an impact on all other IRS jobs.
This is what I found in TIGTA’s report that really blew me away:
[M]ore than one-third of all executives and almost 20 percent of nonexecutive managers are currently eligible for retirement. IRS data indicate that within five fiscal years, nearly 70 percent of all IRS executives and nearly one-half of the IRS’s nonexecutive managers are projected to be eligible for retirement. Overall, about 40 percent of the IRS’s employees will be retirement eligible within five fiscal years.
Executive positions are not easy to fill; it is critical that the IRS finds the right people to take over when the current executives retire. In short, it takes a lot of human capital to ensure there will be enough human capital to go around in the future. They will have their hands full during the next 5 years.