Building a stronger federal workforce in an era of cost-cutting

With 62,242 announced job cuts across 17 agencies last month and continued efforts by the Department of Government Efficiency (DOGE), many agencies are scrambling to find new ways to deliver mission-critical operations and implement Administration priorities. While this challenges those heavily reliant on technology resources from major contractors, it also creates an opportunity to streamline processes and reduce costs to the government and taxpayers. This inflection point gives agencies a new mandate to focus on strategic workforce development in alignment with innovative modernization efforts.  They can reconstitute their teams to match the evolving technology and policy demands without sacrificing essential operations.

While the federal government is known for relying on contractors to manage specialized tasks and bridge skill gaps, this approach is too expensive as a long-term resourcing solution. In FY2023 alone, DOD contract obligations and payroll spending totaled $609.2 billion - 2.2 percent of the country's gross domestic product (GDP).  For federal workers with a master’s degree or higher, their total compensation is, on average, lower than that of federal contractors with similar education and skill sets. Contractors can be useful in providing specialized knowledge, but they are also more expensive than federal workers – and they don't offer the same cost-effectiveness and mission commitment as a well-equipped and upskilled internal workforce.

At many agencies, contractors outnumber federal employees by more than two-to-one with an estimated government spending of $427 billion on contracted services last year a ..

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