Podcast Summary: Statecraft – "99.8% of Federal Employees Get Good Performance Reviews. Why?" Host: Santi Ruiz
Guest: Scott Kapoor, Director, U.S. Office of Personnel Management (OPM)
Date: December 16, 2025
Episode Theme: An insider exploration of federal government personnel management, with an emphasis on workforce reductions, hiring reforms, the realities of federal HR, contractor dynamics, performance management, and attracting young talent.

Episode Overview

This episode delves into the operational and philosophical shifts underway in the U.S. federal government's workforce. Scott Kapoor, Director of the OPM (and former tech VC partner), joins Santi Ruiz to discuss the scale and scope of federal personnel decisions—including layoffs, hiring, contractor use, and a surprisingly rosy picture of employee reviews.

Key Discussion Points & Insights

1. Director Kapoor’s Background and Role

• Kapoor describes OPM as "the talent management organization" for the federal government, preferring this term to "HR" because it suggests a more holistic approach (01:10).
• His tech and VC experience shaped his view: in both, "what ultimately separates great companies from either good companies or companies that fail often comes down to do you have the right people in the right roles... do you have a culture that ultimately enhances kind of performance?" (02:38).

2. Workforce Reductions: Scope, Strategy, and Repercussions

• Despite headlines, direct firings (terminations for cause or through reduction in force, RIF) account for only about 25,000 of 300,000 government staff reductions in 2025; the vast majority were voluntary exits, early retirements, or attrition (08:03).
• Kapoor openly notes: "I do think it's important for your listeners to understand that despite all the press coverage around firings... the actual numbers of firings are a very, very small minority..." (09:10).
• On voluntary departures: "My personal interpretation of probably why a lot of those people chose to leave... they probably said, hey, look, this is different from what I signed up for. ...That's perfectly within any employee's prerogative." (09:44)
• Where layoffs did occur, Kapoor stresses the need for empathy: "Eliminating jobs is not something that should be taken lightly. It's a fundamental breaking of trust... both those leaving and those staying." (08:03)

Timestamps

• [08:03] Discussion on overall headcount reductions and process breakdowns
• [11:22] Legal pushbacks and impact on number of RIFs
• [15:39] On necessity and frequency of rehiring after RIFs

3. Government Contractors vs. Full-Time Employees

• Kapoor notes, "It's unfair for me to blame everything on, on the Clinton Gore administration... but that's where you really start to see, effectively contractors start to substitute for FTEs." (23:48)
• Contractors outnumber federal employees by two-to-one, and cost nearly three times as much per head; Kapoor acknowledges this signals possible misplaced priorities or inefficiency (22:46).
• "At some point, headcount is a vanity metric. The real metric is like, are you actually being efficient?" (24:02)
• He expresses openness to raising full-time headcount if it "generates savings overall from reduction in contractors" (25:08).

Timestamps

• [22:46] Contractor statistics and implications
• [25:32] Discussion of tradeoffs and metrics beyond headcount

4. Strategic Workforce Planning & Challenges

• Agencies have historically struggled with strategic workforce planning; Kapoor sees this as "a muscle that most people haven't exercised for a long time" but expects that recent private-sector hires will adapt more easily (18:40).
• He’s critical of “headcount as a vanity metric,” urging agencies to focus on efficiency and meaningful reprioritization—not just shrinking staff (24:02).

5. Congressional Authority, Executive Tools, and Pay Scales

• Many constraints (esp. on pay) are statutory and require congressional action: "I cannot change today what the top end of the GS15 scale says... without Congress" (50:09).
• OPM can leverage special hiring authorities, retention bonuses, and regulatory cap exceptions—in small numbers and for critical skills (51:40).
• On pay scale compression: "We have a system where the bottom of the pay scale to the top ... should be wider. ... There should be way greater distinction for people who are truly like knocking the COVID off the ball." (47:26)

Timestamps

• [29:03] Kapoor on the limits and needs for legislative agenda
• [50:09] Tools OPM can use without Congress
• [54:39] Example: CHiPs program office's special hiring authorities

6. Hiring Reform: Real Changes in Process

• Three recent wins highlighted:
  1. The CHANCE to Compete Act, encouraging merit-based hiring (31:36)
  2. The end of the Luevano consent decree, unlocking objective skill tests (31:36)
  3. Moving to a two-page resume for applications (31:36)
• Kapoor: "The honest answer about the two page resume is like the two page measurement should be a one page resume, not a two page resume... the value of a resume is really just to kind of, you know, give you a recitation of some of the things that are, you know, what you deem relevant..." (37:24)
• OPM is actively soliciting off-the-shelf technical assessments from the private sector to expedite merit-based hiring (34:04).

7. Job Classifications, Bureaucratic Risk Aversion, and Culture Change

• Overly granular and risk-averse processes have led to 600+ federal job classifications, which complicate hiring (35:50).
• Kapoor: "People have, in my mind, way overestimated the risk here and way underestimated the upside value of like having a more streamlined classification process." (36:24)

8. Performance Management – Why 99.8% Get Good Reviews

• Kapoor sees a broken performance management system: "99.7 or 0.8% of federal employees in government receive a fully successful..." (44:19)
• This is "way, way outside" the norm; the private sector typically sees 5–10% annual churn due to performance management, he notes (44:19).
• Barriers include a cumbersome appeals process (MSPB) and deeply entrenched civil service protections; he's cautiously open to reform but insists "a fair organization" must manage out poor performers (46:24).

9. Attracting Young Talent & The Age Gap

• Federal workforce is aging: only 7% are under 30 vs. 22–23% in the broader economy (56:00).
• The traditional "lifetime employment" pitch "doesn't exist" and is not a helpful message to today's early-career workers (56:28).
• New recruitment narratives will focus on impact, skill relevance, and enabling easier entry and movement between government and the private sector (56:28).

Timestamps

• [56:00] Age demographic overview
• [56:28] Kapoor on the case for young hires

Notable Quotes & Memorable Moments

• On strategic reform:
  "Among many of the great things that I think Elon and the Doge team did was they were really kind of a catalyst to say, okay, like, we have to think about things different. We're going to take an outside view on this." — Scott Kapoor (05:01)
• On layoffs and trust:
  "Eliminating jobs is not something that should be taken lightly. It's a fundamental breaking of trust between the leader of an organization and the employees..." — Scott Kapoor quoting his own blog (08:03)
• On contractors:
  "At some point, headcount is a vanity metric. The real metric is like, are you actually being efficient? Are you spending money in a thoughtful way?" — Scott Kapoor (24:02)
• On performance reviews:
  "99.7 or 0.8% of federal employees in government receive a fully successful ... So part of that is, we have a performance management system ... that doesn't work." — Scott Kapoor (44:19)
• On recruiting young people:
  "The pitch basically ... has been lifetime employment. ... Sorry to tell you, but number one, like that doesn't exist. People have been lying to you... and that's just a terrible like marketing message for a, you know, under 30 person." — Scott Kapoor (56:28)
• On moving between public and private sectors:
  "It's totally fine for you to go back and forth between the government and the private sector... let's not build an entire system that is based around a 10 year... career path that just isn't consistent with how people in the early career stage think about the world anymore." — Scott Kapoor (57:10)
• On the practicalities of change:
  "Look, at some point there's probably no substitute for an actual interview." — Scott Kapoor (42:32)

Segment Guide by Timestamp

• 00:05–03:40: Introduction; Kapoor’s background; philosophy of talent management
• 03:40–07:10: Kapoor’s approach vs. predecessors (“Doge” and Elon); institutionalizing efficiency
• 07:10–15:39: The reality behind federal layoffs, firings, and why the numbers are less drastic than press implies
• 15:39–21:37: Why some agencies had to rehire after cuts; workforce planning and perennial challenges
• 21:53–26:22: The true cost and prevalence of contractors; headcount vs. efficiency
• 26:22–30:48: Discussion of Congressional constraints and agency responsibilities
• 31:36–38:23: Hiring reform successes: merit-based assessments, resume simplification, job classifications
• 39:00–43:34: The history of self-attestation in hiring; difficulties with performance evaluation
• 43:34–49:44: Performance management, involuntary turnover, pay compression
• 49:44–55:23: What OPM can do now; existing tools and regulatory options
• 55:23–61:51: Attracting and retaining young talent; demographic shifts; marketing public service to the next generation
• 61:53–62:00: The wrap-up

Conclusion

Director Scott Kapoor provides a revealing look at the challenges and opportunities of transforming federal personnel management. The conversation ranges from the intricacies of headcount reduction to the future of government hiring and performance management, all delivered with candid, tech-influenced optimism. The episode is essential listening for anyone interested in how government can become a more nimble, attractive, and high-performing employer.