Summary: To help reduce and restructure their workforces, federal agencies have been paying separation incentives, or "buyouts," of as much as $25,000 to employees to voluntarily leave federal service. On the basis of its previous studies of buyout programs at federal agencies, studies by other organizations, and its review of proposed and enacted buyout legislation, GAO identified 13 practices associated with effective buyout usage. These practices include ensuring prior to downsizing that actions planned to maintain productivity and service levels do not cost more than the savings generated by the workforce reductions; preceding buyouts with an economic analysis showing whether they would generate more net savings than reductions-in-force or attrition; and using buyouts selectively to eliminate positions in order to accomplish specific organizational objectives. Taken together, the practices can help agencies use buyouts as a tool to manage their downsizing efforts and engineer desired changes to their workforces. Nevertheless, because each agency's circumstances are unique, all of these practices may not apply in every buyout situation.
