How some private sector HR leaders can prepare for a potential government shutdown

The US government is on the verge of a shutdown. If lawmakers cannot reach an agreement on government spending, the government will cease many operations starting on Oct. 1.

While furloughed government workers are guaranteed back pay and may be eligible for unemployment during the shutdown, some government contractors may have to stop working. This impacts the businesses that employ them, as payments may temporarily halt for nonessential work or contracts that don’t already have appropriated funds, according to GovCon Wire, a government contracting news outlet. However, these companies can prepare for the potential financial changes while also helping employees make the most of their down time.

Prepare before things get bad. Betty Thompson, chief people officer at Booz Allen Hamilton, a consulting firm that works on US government projects, explained that HR leaders should prepare for some hypothetical financial situations. She works with Booz’s treasurer to determine how much the business would be impacted by a shutdown, how many employees would be affected, and how much they could afford to continue paying those workers. “For many years now, we have faced the possibility of a government shutdown,” she said, explaining that Booz Allen Hamilton did some financial belt-tightening in the last year to prepare.

“Generally, if there’s not funding to allow the work to carry forward, the contractor either has to stop working or be at risk of not getting paid if they continue,” Bob Tompkins, a Washington, DC, attorney with Holland & Knight, told the Federal Times.

Thompson emphasized that it’s important for HR leaders to keep staff informed of plans, so they know that the company is prepared in case of a shutdown. “We communicate to staff at the right time that they should not worry, that we will cover them for at least two weeks, or a week, wherever we think is the right place to hit…so that they don’t think that their pay is going to be impacted because of the government shutdown,” she said.

Finally, she recommended that HR decide in advance how employees can make use of the time they’re not working on government contracts. For example, Booz Allen Hamilton looks for mandatory training that employees can complete during that time.

And if all else fails, maybe the contractors can use their extra time to watch The West Wing.

Update 09/22/23: This article has been updated since it was first published.