Federal Talent Pipeline Concerns Grow Amid Shutdown

The ongoing government shutdown is raising concern across the federal contracting community that resulting layoffs could hinder recruitment and retention — a challenge that comes amid the administration’s push for growth in the AI and emerging tech workforce.

“We’ve gone from the federal workforce viewing itself as a fairly stable and durable career … to completely reversing that,” former OMB Associate Director of Performance and Personnel Management Loren DeJonge Shulman, who left the position in January, told GovCIO Media & Research in an interview. “The erosion of job security, benefits and mission alignment has left many federal employees questioning their future in public service.”

Shulman noted that the current approach in workforce reductions could amplify uncertainty and fear, leaving federal workforce demoralized and vulnerable to attrition. “Why am I still doing this?” Shulman said, voicing the internal debate of many public servants. “Am I more valuable in the private sector? At state or local governments? Overseas?”

Despite reductions in force across federal agencies, the administration has pushed for the expansion and development of talent pipelines in industry and government to hire, reskill or upskill employees prepare them for the workforce of the future.

The Labor Department’s talent strategy released in August outlines five pillars to build the workforce of the future: industry-driven strategies, worker mobility, integrated systems, accountability, and flexibility and innovation.

“The challenge for workers, educators and industry in other job training initiatives is that it’s hard to build job training curricula in a centralized fashion,” American Enterprise Institute (AEI) senior workforce development fellow and former Labor Department Acting Assistant Secretary Brent Orrell told GovCIO Media & Research in August. “Programs serve individual workers, but the particular needs of any given business are different.”

Employer-Led Initiatives Aim to Strengthen Federal Talent

The first pillar of Labor’s talent strategy — industry-driven strategies — calls for “federal investments toward employer-led upskilling initiatives designed to fill talent shortages in priority industries.”

Zoe Barrett, head of public sector partnerships at Guild, said the Trump administration’s push to make workforce development employer-led matches industry’s perspective on how to cultivate the next generation of the workforce.

“I think that the work the administration is doing on the new talent strategy is really aligned with a lot of historical thinking on what could or should change in workforce development,” Barrett told GovCIO Media & Research. “One, being employer-led. How do you bring employers to the table more quickly? And from our perspective, you need to create incentives for them to invest in their workforce.”

Barrett pointed to initiatives within industry, such as companies paying universities and programs to upskill employees on the company’s dime, demonstrating clear pathways for employee success and development.

Within government, Barrett said that grants from agencies like the Labor Department that trickle down to states also offer opportunities for upskilling and reskilling with clear development pathways for employees.

“We’re actually partnering with a state who won one of those grants in aerospace, AI, infrastructure and manufacturing, to both increase capacity and additional investment for those industries in their state,” Barrett said. “A second part of the grant will be focused on how do we reskill and outskill people in typical retail jobs into these in-demand industries that might already have existing education benefits programs.”

Barrett said one of the biggest challenges in developing talent pipelines is timing — specifically, when and where to train employees for certain roles. Another challenge, she noted, is determining how much responsibility employers should take for reskilling or upskilling their workforce as job consolidations occur.

“I think employers are still not sure what is their role in outskilling when they know there might be consolidation of job functions in their business. … We’ve had probably a dozen conversations with employers of we know in 12 to 18 months, these roles are going to be eliminated, and we’re not sure what role we should take actively now versus later,” Barrett said.

AI is Transforming Workforce Development

Artificial intelligence is reshaping talent pipelines, Barrett said, as employers work to prepare employees to use AI in their workflows while also finding suitable roles for those who don’t interact with AI on a daily basis.

“There’s an opportunity to think differently about talent pipelines right now, and the looming concept and practice of AI is certainly catalyzing that. But I also think the shift in where the country is focusing investments on workforce development will also require that, because in the sense of skilled trades or advanced manufacturing, there’s limitations on how many people you can get into those programs, because they require in person learning,” Barrett said.

She added that although industry will continue to drive AI development, people skills and well-designed education programs will be critical to building AI literacy and fluency across the workforce.

“In the age of AI, there’s more of a need to focus on durable human skills, and those skills, I think, are still not well packaged or delivered to learners today,” Barrett said.