SEC Hiring Freeze Negatively Impacted Overall Mission, GAO Finds

The Government Accountability Office (GAO) has provided supplemental information to accompany a December report on personnel management at the Securities and Exchange Commission (SEC). The information provides insight into how employees at the SEC reacted to the nearly three-year hiring freeze within the agency based on a GAO survey of executive and non-executive agency personnel.

The SEC instituted a hiring freeze of new employees from October 2016 to April 2019 due to financial limitation. GAO surveyed 877 non-executives and 80 senior officers in mission critical jobs within the agency, of which about two-thirds responded, to accompany their report on personnel management within the agency.

Employees reported a noticeable negative impact of the hiring freeze, with 65.7 percent of employees saying the freeze impacted their workload. Over 90 percent of supervisors and managers within the SEC said the freeze negatively impacted their division’s workload, and half noted a large negative impact.

The December GAO report noted a net decline in positions nationwide during the freeze, writing, “Based on SEC’s budget justification documents, from October 1, 2016, through September 30, 2018, SEC lost a net total of 476 positions agencywide, including 363 positions across its mission-critical offices and divisions.”

With a decrease in positions, employees noted a lack of capacity to further the agency’s mission. Over 57 percent of employees said their office lacked the necessary staff to accomplish their work volume. The survey results also reveal that 31 percent of respondents felt the freeze had a large negative impact on morale within the agency.

Even following the freeze’s lifting, the GAO survey indicates managers continue to struggle with filling positions. Over 70 percent of managers noted the hiring process is too time consuming and nearly 54 percent said the agency needs to do more to invest in new manager development. Still, nearly 70 percent of non-executive respondents felt SEC management usually hires employees who are a good fit for the SEC’s mission.

The GAO reiterated several previous recommendations to the agency and recommended the SEC develop procedures to ensure transparency and fairness in a new performance bonus program it plans to implement in 2020.