Departing personnel said the SEC had not yet experienced the full effects of losing 900 employees. Image: Andriy Blokhin/Shutterstock.com
By: FEDweek StaffThe GAO has issued the latest of what has become a series of warnings about the impact of agency downsizing last year, in this case focusing on loss of expertise at the SEC as it lost nearly 900 employees, 18 percent of its staff.
While the agency did not conduct any RIFs—more than two-thirds of those who departed took deferred resignation offers and the rest left for early retirement or other reasons—more than half of the employees GAO spoke with “said that departing employees had either unique knowledge or specific subject matter expertise, resulting in a loss of institutional knowledge.”
Some said “they believed SEC had not yet experienced the full effects of these departures” at the time of the interviews; one said the agency “has many ‘single points of failure’ in key areas of expertise and that it would take time to determine what expertise the agency had lost.”
About a third “said they or their colleagues had taken on additional work or responsibilities following employee departures to ensure SEC could continue to carry out its mission.” Others “stated they did not expect to meet their division or team goals, were unsure if they could meet them, or that management had already lowered their goals for the year. For example, one supervisor said their manager lowered their team’s goals for disclosure reviews by 20 percent in 2025 because of the loss in personnel.”
The return-to-office directive also had an impact, it said, with some employees telling GAO that they “no longer work outside their normal work hours, as they frequently did when teleworking. One supervisor noted this could affect SEC’s ability to quickly respond to market developments that occur outside work hours, as employees might be concerned about violating the telework policy.”
Meanwhile, by mid-year the agency had begun asking for exemptions from the general hiring freeze, and started using temporary promotions “to fill areas of critical need.”
The SEC has taken other steps to deal with the impact of the losses, the GAO said, including holding meetings with division and major office heads “to identify skill and resource gaps” and has created a staffing plan “that identified positions for potential hiring for each division and office.”
Because the report was in the nature of an assessment, it made no recommendations.
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