Odd Lots Podcast: Why Government Hiring Is So Inefficient Bloomberg | Release Date: January 13, 2025

In this compelling episode of Bloomberg's Odd Lots podcast, hosts Joe Weisenthal and Tracy Alloway delve deep into the pervasive inefficiencies plaguing government hiring practices. Featuring insights from Jennifer Pelka, author of Recoding America and a senior fellow at the Niskanen Center, the discussion unpacks the structural and procedural barriers that hinder effective recruitment and retention within government institutions.

1. Introduction to Government Inefficiency

Joe Weisenthal (01:15):

"If you look at government spending... many things everyone can point to and say, this is waste, this is bad, we should change this. But like, that's clearly just being able to identify some bad process... like, identification almost seems like the easy part."

Tracy Alloway (01:28):

"At large organizations, everyone kind of feels helpless. Like, everyone can say we need to do this better... but no one actually seems able to fix it."

Insight: The hosts set the stage by highlighting the common frustration with government inefficiency, emphasizing that while identifying problems is straightforward, implementing solutions remains a significant challenge.

2. The Complexity of Government Spending and Processes

Joe Weisenthal (02:17):

"We're in a moment of frustration... People want to see waste and spending decline... and they also want to see that the spending that we actually do allocate turns into results."

Tracy Alloway (02:41):

"It feels like when organizations are swimming in money and have large budgets, they don't actually have to think about how to best spend that money."

Insight: The discussion underscores a critical disconnect between allocated budgets and tangible outcomes, suggesting that abundant funding often leads to complacency rather than efficiency.

3. Structural Barriers in Government Hiring

Jennifer Pelka (Brandon Mitchell) (22:31):

"90% of those use only self-assessments of the person's own skill... leaving all that aside, let alone, HR is in control."

Tracy Alloway (26:47):

"That is nuts. So just to be clear, because he said on his cv, specific programming languages like I can use like Babel..."

Insight: Pelka articulates a fundamental flaw in the hiring process: the overreliance on self-assessments and rigid HR protocols that fail to accurately gauge a candidate's true capabilities, often filtering out highly skilled individuals.

4. Case Study: Unemployment Insurance System Modernization

Jennifer Pelka (16:03):

"The unemployment insurance system... ended up with thousands of requirements that have been accumulating for 90 years... We just don't do that really what we need to do is do a full kind of regulatory simplification policy and process simplification alongside our modernizations."

Tracy Alloway (16:54):

"Wow."

Insight: Using the California unemployment insurance system as an example, Pelka illustrates how decades of policy additions have created an overcomplicated framework that stifles effective modernization and efficiency.

5. The Challenge of Firing Underperforming Employees

Jennifer Pelka (26:30):

"Most of the time on a practical basis, what happens is they say that HR will tell you it's going to be impossible to fire this person."

Tracy Alloway (46:57):

"It feels like there's also an incentive problem where if you're a manager dealing with a bad employee... there's a lot of empire building as well."

Insight: The hosts and Pelka discuss the arduous process of terminating underperforming government employees, highlighting how entrenched HR policies and internal politics often prevent necessary personnel changes, thereby perpetuating inefficiency.

6. Attempts at Reform: Smequa and Beyond

Jennifer Pelka (42:45):

"Under the first Trump administration, a team at the United States Digital Service started something with the absolutely awful name of smequa... It hasn't scaled... it was still a pretty heavyweight process."

Joe Weisenthal (43:00):

"Hey, at least it's not Doge. Right?"

Insight: Pelka recounts the smequa initiative aimed at improving the hiring process through better assessments. Despite initial successes and positive feedback, the program struggled to gain widespread adoption due to systemic inertia and the cumbersome nature of government operations.

7. Potential Solutions and Future Directions

Jennifer Pelka (50:21):

"I maintain that the merit system principles defined in that 1978 CSRA are great. What we just need to do is sort of like pull the edifice back to the studs like it's a massive remodel."

Tracy Alloway (50:05):

"And so if you were looking to streamline some of those processes... it seems like you could use AI to go through a lot of those rules."

Insight: Pelka advocates for a foundational overhaul of the hiring system, emphasizing the need for regulatory and process simplification. She also hints at leveraging technology, such as AI, to streamline and reduce the complexity of existing workflows.

8. Political and Cultural Barriers to Change

Jennifer Pelka (37:27):

"I'm in that weird position as a Democrat... but I have to acknowledge that a sort of extremely disruptive approach might be needed for us to just get out of the rut that we're in."

Tracy Alloway (41:25):

"He did. And I will say that he... acknowledged... that Congress is in charge of laws and regulations... but he is certainly coming from this place of just completely crazy ideas."

Insight: The conversation touches on the political challenges of instituting change, noting that while bipartisan desire for efficiency exists, entrenched interests and ideological differences often impede meaningful reform.

9. The Role of Leadership in Driving Efficiency

Jennifer Pelka (37:27):

"Both parties do that. And because we've neglected the how it's gotten really, really sclerotic... I think it's part of culture of both the left and the right to fight a lot about the what of government."

Tracy Alloway (49:46):

"And so if you were looking to streamline some of those processes... it seems like you could use AI to go through a lot of those rules."

Insight: Pelka emphasizes the necessity of strong, perhaps even disruptive, leadership to break through bureaucratic inertia. She suggests that traditional, incremental approaches may be insufficient in addressing the deep-rooted inefficiencies within government systems.

10. Conclusion: The Path Forward

Joe Weisenthal (52:04):

"Everyone on both sides of the aisle can agree that they want an effective government... This is a really interesting topic. I think we'll do more on it."

Tracy Alloway (52:09):

"If you enjoy Odd Lots, if you like it when we dive deep into various bureaucracies, then please leave us a positive review..."

Insight: The episode concludes with an acknowledgment that while the challenges of government inefficiency are complex and multifaceted, there is a collective recognition of the need for effective reform. The hosts express optimism about continuing to explore and address these critical issues in future episodes.

Key Takeaways

• Rigid Hiring Processes: Government hiring is bogged down by overly prescriptive HR protocols that prioritize fairness and process over actual skill assessment.
• Bureaucratic Accumulation: Decades of policy additions without systematic simplification have created convoluted systems that resist efficient modernization.
• Challenges in Workforce Management: The difficulty in terminating underperforming employees perpetuates inefficiency and hampers organizational effectiveness.
• Reform Initiatives Struggle: Efforts like smequa show promise but face significant barriers to scalability and widespread adoption.
• Need for Foundational Overhaul: Comprehensive reform addressing both policy and process simplification is essential for meaningful improvement.
• Leadership and Political Will: Effective change requires strong leadership willing to disrupt entrenched systems, transcending partisan divides.

Notable Quotes:

• Jennifer Pelka (16:03):

  "We really ought to be putting the best our country has to offer on the biggest problems. And it's kind of the opposite."

• Tracy Alloway (26:47):

  "That is nuts. So just to be clear... the HR manager didn't recognize it."

• Jennifer Pelka (37:27):

  "I have to acknowledge that a sort of extremely disruptive approach might be needed for us to just get out of the rut that we're in."

This episode of Odd Lots provides a thorough examination of the systemic issues undermining government hiring efficiency, offering both a diagnosis of entrenched problems and contemplation of potential pathways toward meaningful reform. Jennifer Pelka's expertise sheds light on the intricate interplay between policy, process, and organizational culture, underscoring the urgency for transformative change in governmental operations.