The Internal Revenue Service eliminated its Employee Suggestion Program without plans for a substitute, and that decision may have been premature, according to a new report.
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Employee morale and engagement could suffer without an adequate outlet for IRS employees to share their suggestions and recommendations. Only 63% of IRS employees felt encouraged to come up with new ideas, and only 52% felt the IRS was committed to providing the necessary resources to develop new ideas, according to a fiscal year 2022 survey report of federal employees.
TIGTA believes IRS managers and executives should have a forum for employees to communicate their ideas and concerns and must have the willingness to listen to and engage with their employees. On Oct. 1, 2021, the IRS eliminated its Employee Suggestion Program without a plan or expressed the intention to replace it. The IRS said the reasons for the termination of the ESP included the high administrative costs of the program, compared to the benefits received, and the significant rate of rejection by the IRS of its employees' suggestions.
By far, the highest costs of the program were 207 coordinators, who weren't actually subject matter experts and whose roles were mainly administrative in nature. TIGTA found those administrative costs seemed excessive. Of the 2,824 employee suggestions that made it through initial screening, the coordinators spent an average of 31 hours per suggestion.
The IRS does offer some other venues for employee suggestions, but there aren't any monetary enticements, as there were with the program that's been eliminated. While some IRS business units have employee engagement forums, the report noted, they're not effective substitutes for the suggestion program as they don't allow employees to submit their ideas or suggestions and to receive rewards for suggestions that are adopted.
The Employee Suggestion Program was in place for several years. From fiscal year 2018 through fiscal year 2021, IRS employees submitted 3,638 total suggestions with an over 2% adoption rate. TIGTA reviewed a sampling of 40 rejected suggestions and found that 34 of 40 suggestions weren't properly evaluated. Within the same 40 suggestions, 18 were returned to the submitter because they failed to include a calculation of the estimated cost savings, though that wasn't really a required criterion for a suggestion to be accepted.
TIGTA found the program lacked support from leadership of the IRS business units in several respects. For example, the program administrators lacked the training and expertise needed to successfully carry out their jobs, and that contributed to the ineffectiveness of the program, according to the report.
TIGTA recommended in the report that the IRS should contact other federal agencies with the highest levels of engagement and employee satisfaction for best practices on their employee suggestion programs. It should use the information it gleans, as well as employee survey data, to develop options for a new IRS-wide employee feedback process to support the agency's transformation efforts under the Inflation Reduction Act. IRS management agreed with both recommendations.
The IRS is set to receive an extra $80 billion over 10 years under the Inflation Reduction Act of 2022, and much of the money will go toward hiring more employees to replace the wave of baby boomers retiring from the overworked agency. The IRS managed to hire thousands more employees last year after Congress gave it more money, plus expedited hiring authority after complaints rose about the backlog of millions of unprocessed tax returns and correspondence piling up at IRS offices around the country after the pandemic.
"Employee engagement is vital to our efforts to our efforts to make IRS the best place to work and empower a high-performing workforce who will execute the IRS mission," wrote IRS human capital officer David Aten in response to the report.
He noted that the IRS encourages employee feedback through forums such as regular team meetings, town halls, "walk in my shoes" activities, "idea walls," lunch and learns, "pulse" surveys and the Federal Employee Viewpoint Survey. He agreed that an improved Employee Suggestion Program could be a valuable tool and added that as part of its bargaining discussions with the National Treasury Employees Union, the IRS committed to exploring a possible replacement program where employees could share their feedback.
