Distrust of FDIC management is causing more staff to consider departures, data shows

By Douglas Gillison

(Reuters) – Staff confidence in management at the Federal Deposit Insurance Corporation has fallen sharply, well below the government average, with a growing number of workers considering leaving the agency, according to the latest data from FDIC staff investigation obtained by Reuters.

In 2023, 38% of FDIC staff planned to leave in the next 12 months, more than double that of 2020, compared to just 33% governmentwide, the data showed.

Only 39% of staff said FDIC leadership inspires strong “motivation and engagement,” compared to 61% in 2020 and 11 percentage points below the government average, according to data obtained through the Freedom Act of information.

The survey was conducted on behalf of the FDIC from August 7 to September 29, 2023 by the Office of Personnel Management, a U.S. agency that supervises public employees and conducts worker surveys each year.

A damning independent review of FDIC misconduct released Tuesday cited elements of the 2023 personnel survey data. The agency has not released the survey’s full results.

The data provides more insight into the extent of low morale and discontent among agency staff, where the potential for high staff turnover could threaten its ability to oversee lenders while many are struggling due to high interest rates.

An FDIC spokesperson said the survey was an “important tool” for measuring staff attitudes that informed the FDIC’s recruitment and retention efforts, which have improved over the past year .

The FDIC’s internal watchdog warned in two recent reports that recruiting remains below pre-pandemic levels and that high attrition rates could compromise “mission-critical” functions. Staff turnover contributed to failures in the FDIC’s supervision of failed lender Signature Bank, according to an agency autopsy.

“Higher attrition rates in 2021 and 2022 were directly related to pandemic-related issues and a robust labor market and have since fallen to more historic levels,” the FDIC statement said. Hiring of entry-level examiners last year was double that of 2021, he adds.

Tuesday’s report, sparked by a Wall Street Journal article in November, revealed a culture that tolerated sexual harassment, discrimination and other misconduct for years.

In recent years, the way the FDIC has handled its rollback policy has been a major source of discontent, said Vivian Hwa, president of the National Treasury Employees Union chapter representing workers at FDIC headquarters in Washington. She said the FDIC began walking back in 2022 on an agreement allowing workers to report to the office as needed.

Workers are often called into the office arbitrarily and without a clear business purpose, said Doreen Greenwald, national president of the National Treasury Employees Union.

More than 80% of employees who said they were considering leaving cited remote work arrangements as a factor.

According to the sexual harassment report released Tuesday, the return-to-power policy was a “particular point of discontent” among staff.

“It’s the way they did it, the fact that employees didn’t feel like they were consulted or participated in the process,” Hwa said.

The proportion of employees who believe leadership involves them in decisions that affect their working lives fell to just 39% in 2023, a drop of 17 points from 2020, the data showed.

The Journal article also confirmed the view of many staffers that FDIC bosses had not adequately responded to misconduct, which likely contributed to the steady decline in ratings, Hwa added.

“People have been aware of these issues for a long time. … Over time, certain actions and behaviors on the part of FDIC management have made employees feel like they have no power,” Hwa said.

The share of FDIC staff who said they believed management maintained “high standards of honesty and integrity” fell to 56% from 74% in 2020. Only 52% of staff expressed a “high level of respect” for FDIC leadership, compared to 73%. three years earlier.

In comparison, the government average for both indicators has remained stable at around 60% over the same period.

(Reporting by Douglas Gillison; editing by Michelle Price and Richard Chang)