Seizing the Moment: A Call for a New National Hiring Compact to Retain America’s Public Sector Talent
As federal programs disappear, the private sector has a rare chance to retain talent and rebuild what comes next.
Executive Summary
America is facing the largest federal workforce contraction in a generation—not just among government employees, but across the contractors, grantees, and partners who keep our public systems running. As programs are dismantled and talent is displaced, we are watching what could turn into a national brain drain. But this is also a rare moment of opportunity. If the private sector steps up now—with urgency, coordination, and imagination—we can not only prevent irreversible loss, but build a stronger, more resilient civic and economic future.
This crisis is bigger than federal employees. More than 300,000 professionals—including contractors, grantees, nonprofit staff, and university researchers—have already lost or are at risk of losing their jobs due to the rollback of federal programs and funding.
Entire regional economies are on the line. Federal and contractor jobs anchor local economies in places like Maryland, Northern Virginia, and California. As these roles vanish, small businesses, housing markets, and tax bases begin to erode, triggering cascading impacts.
We’re witnessing a potential brain drain. Scientific and public health talent is being actively recruited by foreign governments and institutions. If we do not act now, the U.S. risks ceding its leadership in innovation, research, and global development to other nations.
States are stepping up and showing us what’s possible. Governors from New York to Hawaii are fast-tracking displaced workers into thousands of open roles. Their actions prove that this workforce is valuable, adaptable, and ready to serve if given a path.
The private sector must move with equal urgency. From biotech and cybersecurity to logistics and consulting, American industries stand to gain from this influx of experienced, mission-driven professionals. But only if they act before this talent pool disappears.
Now is the time to build a National Hiring Compact. Let’s coordinate a cross-sector response—modeled on veteran hiring efforts—that includes clear commitments, centralized job platforms, and transition support. Together, we can transform a moment of disruption into a national advantage.
Call to action: If you lead hiring, manage grants, or influence strategy, particularly in the private sector, this is your moment. Reach out. Start a conversation. Build the partnerships needed to retain public talent, strengthen our workforce, and rewrite what’s possible after crisis.
A Moment of Loss and a Window for Leadership
Across the country, a quiet collapse is underway. Federal agencies are bleeding talent, and the communities that depend on public programs are feeling the impacts. But buried inside this crisis is an enormous opportunity for private companies, state governments, and anyone looking to hire purpose-driven professionals.
We’re witnessing the largest exodus of public servants in a generation. And it’s not just federal employees—contractors, grantees, academic and local partner organizations and roles are being eliminated as part of the vast, interconnected ecosystem that relies on federal funding. But what if we didn’t just watch it happen? What if we responded with a national hiring compact to absorb this extraordinary workforce and turn loss into leadership?
Widespread Fallout: From Federal Jobs to Local Economies
Since early 2025, a series of executive orders and presidential memoranda have mandated sweeping reductions in the federal workforce, with agencies required to hire only one new employee for every four departures. The Department of Government Efficiency (DOGE) is driving these changes, targeting both “non-essential” and “non-statutory” functions. The impact is immediate and profound: as of April 2025, more than 136,000 federal employees have exited, with an additional 170,000 planned reductions—over 12 percent of the federal workforce.
But this is just the tip of the iceberg. The federal government’s reach extends through a vast network of contracts and grants. Agencies like the Department of Defense, EPA, Department of Education, NIH, CDC, USAID, and others rely on private companies, nonprofits, and academic institutions to deliver essential programs and services. When federal contracts and grants are canceled or scaled back, the organizations that implement these programs are forced to lay off their own staff.
Estimates suggest that when you include contractors and grantees, the total number of jobs at risk climbs to 1.2 million—about 2 percent of all U.S. job separations in 2024. This includes:
Federal employees from agencies such as the Department of Defense, IRS, Department of the Interior, EPA, Department of Veterans Affairs, HUD, USDA, Department of Energy, FAA, NOAA, CFPB, Department of Education, DHS, USAID, CDC, NIH, GSA, SBA, and OPM.
For-profit contractors (e.g., Booz Allen Hamilton, Deloitte, Lockheed Martin) providing services in defense, cybersecurity, health, logistics, and technology.
Nonprofit and academic grantees (e.g., USAID implementers, research universities, public health NGOs) who depend on federal funding for their operations and staff.
Subcontractors and local partners who provide support services and are integral to regional economies.
The consequences are not contained to the federal workforce. Each federal layoff is estimated to result in the loss of at least 1.3 additional jobs, as contractors, suppliers, and local businesses lose revenue and demand. In regions with high concentrations of federal activity—such as Northern Virginia, Maryland, and California—federal and contractor jobs are economic anchors, supporting as many as 2.5 additional jobs each and generating a significant share of regional GDP. As federal jobs disappear, local businesses, suppliers, and even unrelated industries feel the impact.
When federal grants and contracts end, universities and research institutions are forced to halt projects and lay off staff. For example, Johns Hopkins University recently announced over 2,000 job cuts after $800 million in grants from the federal government were cancelled. Local economies are seeing declines in consumer spending, housing demand, and tax revenue, while residents are experiencing reduced access to services ranging from public health to education and infrastructure.
The Brain Drain: America’s Loss, the World’s Gain
The devastating cuts to federal research funding have triggered a potential “brain drain” unprecedented in modern U.S. history. As the Trump administration slashed billions from the NIH, NSF, NASA, and other agencies, thousands of scientists and early-career researchers lost their jobs or saw their grants canceled. Between February and April 2025 alone, nearly 700 NIH grants were canceled, and at least $2.5 billion in research funding has been rescinded overall.
These cuts are not just numbers: they represent shuttered labs, halted experiments, and a “lost generation” of scientific talent. Universities have responded with hiring freezes, layoffs, and even the suspension of new graduate student admissions. The potential consequences? A sharp drop in U.S. scientific output, fewer clinical trials, and a decline in biomedical innovation that will extend through the healthcare system for years to come.
Perhaps most concerning, foreign universities and research agencies are actively recruiting America’s displaced scientists. Countries like Canada, Germany, and France have launched initiatives to attract U.S. researchers, offering grants, work visas, and stable funding. According to a recent survey conducted in Nature, 75% of American scientists are now contemplating relocation abroad. European institutions report a surge in applications from U.S. scientists, and the “Choose Europe” initiative is just one of several continent-wide efforts to capitalize on America’s retreat from scientific leadership.
To be frank, I’ve started quietly researching what it would take to move to Portugal. Or Mexico. Or wherever is not here. Not because I want to leave—but because I’m no longer sure this country wants people like me. People who have built their lives in public service, who still believe in systems that are now being deliberately dismantled. I want to stay. I want to fight for what’s possible and I know that is my responsibility as a privileged white women in America to do so—and so I know I will stay. But in the back of my mind, I also know that I have a family to protect. And if I’m being honest, this isn’t just about having a job. It’s about safety. It’s about dignity. It’s about belonging. That’s why I keep returning to this idea—not just as a hiring compact, but as a line in the sand. A way to say: we don’t throw people away.
Notably, this is not only a loss of talent but a loss of future innovation, economic growth, and global competitiveness. For every dollar invested in NIH research, the U.S. economy typically gains $2.50 in growth. The current exodus threatens to undermine decades of leadership in medicine, technology, and basic science.
The professionals now facing unemployment are not just bureaucrats—they are engineers, scientists, cybersecurity experts, project managers, public health leaders, educators, and more. They have managed complex, multimillion-dollar projects, navigated stringent regulatory environments, and delivered results under intense public scrutiny. They are skilled in project management, compliance, analytics, IT, cybersecurity, logistics, scientific research, and public health. Many chose public service or nonprofit work out of a sense of purpose, bringing a commitment to ethics, accountability, and results. These professionals are accustomed to working across sectors, adapting to shifting priorities, and collaborating with diverse teams.
Relatedly, the crisis is compounding an already challenging job market for recent college graduates. Traditional pathways into public service, research, and federal internships have narrowed or vanished. Workforce officials and university career centers warn that this will have long-term effects on talent pipelines, economic mobility, and the nation’s ability to cultivate the next generation of leaders in science, policy, and technology.
For private sector employers, the message is clear: If American companies do not act quickly, the nation’s best and brightest scientists, engineers, and innovators will be lost—not just to unemployment, but to overseas competitors eager to harness their expertise. Now is the time to invest in this extraordinary talent pool, before it becomes America’s permanent loss and another nation’s gain.
States Step Up: Fast-Tracking Federal Workers into State and Local Jobs
As the federal government implements sweeping layoffs, state governments—especially those led by Democratic governors—are moving quickly to recruit and absorb displaced federal employees. These efforts not only help maintain public services but also recognize the unique value and skills federal workers bring to state and local government.
New York has launched a high-profile campaign, with Governor Kathy Hochul publicly inviting former federal workers to apply for over 7,000 vacant state positions. The state is streamlining civil service requirements and expediting entry into high-demand roles in health, transportation, and education.
Pennsylvania Governor Josh Shapiro signed an executive order to fast-track the hiring of federal workers into state government, recognizing federal service as equivalent to state experience. This allows former federal employees to bypass traditional entry-level barriers and access mid-level openings in fields such as public works, engineering, and nursing. Pennsylvania is actively recruiting for 5,600 critical vacancies and has already seen a surge in applications from displaced federal staff.
Hawaii’s Governor Josh Green issued an executive order establishing “Operation Hire Hawaii,” which removes red tape and ensures qualified federal workers can receive conditional job offers within two weeks. Hawaii is aiming to fill 4,000 vacant state positions—about 24% of its civil service roles—especially in conservation, engineering, IT, health, and accounting. The state has hosted job fairs specifically for federal workers and plans more targeted events.
Maryland Governor Wes Moore directed state agencies to prioritize hiring former federal employees and launched a “Federal Workers Navigation” program to help public servants transition into state roles. Maryland is also piloting expedited hiring for critical positions, streamlining recruitment, and launching new resource websites and job fairs. The state is working to address shortages in teaching and public service by helping federal workers gain credentials quickly.
California has joined the movement, recruiting laid-off federal workers for thousands of vacant state jobs. The state is leveraging its strong labor protections and high minimum wage to attract talent from the federal ranks.
Other States and Localities such as Wisconsin, Virginia, Massachusetts, Washington, and New Mexico have launched job fairs, resource hubs, and targeted campaigns to welcome former federal employees. Local governments in cities like Kansas City, Atlanta, and counties in Michigan and Georgia are also actively recruiting, recognizing the value of federal experience for local public service.
These state-led efforts demonstrate a clear recognition of the value, skills, and experience that federal workers bring. They also set a precedent for how the private sector can act with similar urgency and creativity to absorb not just federal employees, but the contractors and grantees who are equally affected by these cuts.
The Veteran Hiring Priority: A Model for National Workforce Response
The United States’ approach to veteran employment offers a proven template for how a national hiring compact for displaced federal workers, contractors, and grantees could be structured and succeed. The veteran hiring priority is the result of decades of evolving policy, culminating in robust public and private sector collaboration.
Veterans’ preference in federal hiring dates back to the Civil War, but the modern framework was shaped by a series of laws and executive actions designed to support veterans’ reintegration into civilian life. The most significant recent milestone was President Obama’s Executive Order 13518 in 2009, which established the Veterans Employment Initiative (VEI). This order recognized the unique sacrifices of veterans and the challenges they faced in the labor market, especially during periods of economic downturn, and set out to improve government-wide recruiting, hiring, and retention of veterans across all federal agencies.
The VEI mandated that federal departments and agencies enhance their outreach, use all available hiring authorities, and set clear goals for veteran employment. It created the Council on Veterans Employment, led by the Secretaries of Labor and Veterans Affairs, to coordinate efforts and report on progress. The Office of Personnel Management (OPM) was tasked with tracking data, issuing guidance, and ensuring accountability.
Federal agencies use several special hiring authorities to make it easier and faster for veterans to enter federal service, recognizing their skills and service. Agencies are required to apply veterans’ preference procedures, and OPM provides oversight and support to ensure compliance.
Inspired by federal policy and the recognized value veterans bring to the workforce, many states have adopted voluntary veterans’ preference statutes for private employers. For example, Arkansas authorized such preferences in 2013, joining a growing number of states encouraging private companies to prioritize veterans in hiring. These policies are often voluntary but signal a strong commitment to supporting veterans’ employment and reintegration.
The private sector has also launched high-profile initiatives. Starbucks, for example, pledged to hire 25,000 veterans and military spouses by 2025—a goal it reached six years early. The company now commits to hiring 5,000 more veterans and spouses each year, partnering with veteran service organizations and offering dedicated support and training. Other major employers, including Amazon and JPMorgan Chase, have established similar programs, often in partnership with public agencies and nonprofits.
The veteran hiring priority demonstrates that:
Clear public commitments, supported by executive action and legislation, drive results.
Centralized data, tracking, and accountability ensure transparency and progress.
Special hiring authorities and preference systems make it easier for employers to identify and onboard qualified candidates.
Public-private partnerships amplify impact, combining resources, expertise, and networks.
Voluntary private sector pledges can be powerful, especially when paired with recognition and support.
A national hiring compact for displaced federal workers, contractors, and grantees can build on these lessons—creating a coordinated, cross-sector response that values public service, leverages proven hiring tools, and mobilizes the full capacity of the American economy to absorb and empower this extraordinary workforce.
Why Private Sector Employers Should Hire Displaced Federal Workers, Contractors, and Grantees
The workforce now facing displacement is not only large but uniquely skilled, representing a tremendous, immediate opportunity for private sector employers across a range of industries. Here’s why:
Pharmaceutical and Life Sciences. Pharmaceutical and biotech companies stand to gain immensely by hiring academic researchers and program managers formerly funded by the NIH, CDC, and USAID. These professionals have led groundbreaking research in infectious diseases, epidemiology, clinical trials, and public health. They are adept at grant writing, regulatory compliance, and navigating complex research protocols—skills directly transferable to drug development, clinical operations, and regulatory affairs in the private sector. As federal funding for university labs and public health programs dries up, companies can tap into a ready pool of PhDs, data scientists, and research coordinators who understand both science and the regulatory landscape.
Technology and Cybersecurity. Tech companies—especially those in cloud computing, cybersecurity, and enterprise software—should look to federal IT specialists and contractors who have managed large-scale digital infrastructure, data security, and modernization projects for agencies like the Department of Defense, IRS, and DHS. These workers are experienced in handling sensitive data, building secure systems, and leading digital transformation at scale. They bring expertise in project management, agile development, and compliance with the strictest information security standards. For example, USAID and CDC contractors have overseen global health data platforms and logistics systems, making them valuable assets for tech firms expanding into health tech, logistics, or government contracting.
Engineering, Energy, and Infrastructure. Engineering and energy firms can benefit from the project managers, engineers, and analysts who previously worked for agencies like the Department of Energy, FAA, NOAA, and the Army Corps of Engineers, as well as their contractors. These professionals have overseen infrastructure projects, environmental assessments, and energy systems at national and international levels. Their experience with federal procurement, compliance, and large-scale logistics is invaluable for companies tackling complex builds, sustainability projects, or entering the government contracting space.
Finance, Compliance, and Risk Management. Banks, insurance companies, and fintech firms should prioritize hiring former IRS, Treasury, and regulatory agency staff, as well as contractors who have worked on federal compliance and risk projects. These workers are skilled in fraud detection, auditing, regulatory reporting, and risk analysis—critical functions in highly regulated industries. Their familiarity with federal standards and processes can help private firms navigate compliance more efficiently and build robust internal controls.
Security and Logistics Sector. Private security or logistics firms can absorb talent from USAID, CDC, and State Department contractors and grantees. These professionals have managed democracy, human rights, health, and humanitarian programs worldwide. They bring expertise in crisis response, program evaluation, logistics, and adaptive management—skills in high demand for organizations working in global development, disaster response, and humanitarian assistance. Top USAID contractors like Chemonics, DAI Global, Abt Associates, RTI, and Tetra Tech have managed multi-million-dollar projects in challenging environments, and their staff are trained to deliver results under pressure.
Cross-Sectoral Consulting. Consulting firms can leverage the program managers, analysts, and subject matter experts who have run federal and global programs. These professionals are adept at stakeholder engagement, strategic planning, and evidence-based decision-making, and are used to working with diverse teams and clients. Their experience in federal procurement and compliance is a strong asset for firms serving government or regulated industries.
Indeed, the private sector has a unique chance to absorb a workforce that is not only highly skilled and adaptable, but also deeply experienced in navigating the world’s most complex regulatory, scientific, and logistical challenges. By hiring displaced federal workers, contractors, and grantees, companies gain immediate access to talent that can drive innovation, ensure compliance, and expand impact, while also helping stabilize communities and sustain American leadership in science, technology, and global engagement.
What a National Hiring Compact Could Do
A comprehensive, cross-sector response should include:
A public commitment from private sector, government, nonprofit, and philanthropic leaders to prioritize hiring not only federal employees but also contractors, grantees, and implementers.
A centralized talent portal to match displaced professionals with open positions, leveraging resume banks, skills translation, and job matching.
Transition support such as mentorship, upskilling, and relocation assistance to help these workers adapt to new sectors and roles.
Collaboration with states and local governments to ensure a seamless, nationwide response that maximizes impact and minimizes redundancy.
This is a defining moment for American business and civil society. The federal workforce contraction is a national challenge with economic, social, and strategic implications. By joining a National Hiring Compact for displaced federal workers and their partners, private sector leaders can access a deep well of talent, fulfill urgent workforce needs, and demonstrate a commitment to the nation’s economic and social resilience.
Let us seize this opportunity to turn a national crisis into a catalyst for growth, innovation, and shared prosperity. The time to act is now—before this extraordinary talent pool is lost to unemployment or to international competitors.
Will your company lead the way?
References
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