OPM Staff Shrinkage Becomes Top Management Risk
Federal contractors serving OPM's HR and retirement functions should expect uneven processing as the agency leans on automation and outside vendors.
Updated on Nov. 2, 2026 in Military Jobs
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The Office of Personnel Management's inspector general has named the agency's shrinking workforce as its top management challenge for fiscal 2027. OPM lost staff in 2025 through the Deferred Resignation Program, reductions in force, and departures, and it processed nearly 1,000 separation actions that year.
Why it matters
Federal human resources and retirement processing run through OPM, so a thinner staff affects how quickly federal employment actions and annuity questions move. The inspector general's concern signals that the agency is still working out which automated tools can absorb the lost capacity.
The inspector general's report draws on OPM's own processing volume, with nearly 1,000 separation actions handled in 2025. Roughly 30% of retirement-related contacts to the hotline concern customer service, a figure that points to where the workforce strain shows up for annuitants and survivors.
The players
Office of Personnel Management (OPM)
The federal agency that manages the government's civilian workforce, hiring, and retirement benefits, including annuity processing for federal employees.
OPM Office of Inspector General
The internal watchdog that audits OPM programs and issued the annual report identifying the agency's top management challenges.
The details
Staffing losses in 2025 came through the Deferred Resignation Program, reductions in force, and departures of probationary and experienced staff. As those roles emptied, the Office of the Chief Information Officer absorbed work contractors had previously handled, including security operations, while also managing technology modernization, cybersecurity, and an AI push. The inspector general cautioned that the agency is still determining which technologies work, making careful resource management and risk mitigation essential.
Timeline
Staffing losses and nearly 1,000 separation actions occurred in 2025.
The inspector general named the shrinking workforce a top management challenge for fiscal 2027.
NARFE reported on the inspector general's report on Nov. 2.
Market Landscape
The Deferred Resignation Program was one of several channels, alongside reductions in force, that reduced OPM's headcount in 2025. The inspector general's framing treats the resulting capacity gap as a standing management problem for fiscal 2027 rather than a one-time adjustment.
Federal contractors and agencies that depend on OPM retirement and personnel processing should expect longer waits for some actions while the agency rebuilds capacity. Operators who sell into federal HR or security services should watch whether OPM shifts more work to contractors or to automated systems.
The takeaway
Track whether OPM's fiscal 2027 staffing and technology plans reduce the customer-service backlog the report describes. Review the full inspector general report on Oversight.gov for the specific management challenges it names.
Further reading
For broader context on federal employment and hiring, see the Military Jobs coverage.
More information
Read the full OPM inspector general report on Oversight.gov.
Source note: This article includes information reported by NJTODAY.
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