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Breaking Job News: The IRS Furloughs Half of Their Workforce & the Increase of Job Hugging

• Pete Newsome

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Corporate America has hit its breaking point. 

New data from Gartner reveals that only 45% of employees achieved their company’s change goals this year, not because they’re lazy, but because the pace of transformation has become ungovernable. Leaders admit their teams are running on fumes, overwhelmed by nonstop restructuring, tech rollouts, and AI-driven demands that move faster than people can adapt.

Today, we unpack how to fix it. From the six “change reflexes” that define resilient teams: openness, time management, context awareness, tech fluency, collaboration, and emotional regulation, to leadership strategies that turn burnout into buy-in, this conversation will help you navigate change without losing your people.

Then we turn to the public sector, where the IRS just furloughed 34,000 workers, nearly half its staff, as the government shutdown drags on. We break down what that means for taxpayers, trust, and the growing crisis of morale inside essential agencies.

But amid all the chaos, one signal stands out: workers are staying put. The Eagle Hill Employee Retention Index just hit a record 105.8, showing that Americans aren’t running from their jobs; they’re hugging them tighter. From confidence in pay and benefits to the proven 25% drop in turnover at flexible companies, we explore why loyalty is surging in one of the most unpredictable job markets ever.

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Pete Newsome:

Today's job market headlines include the IRS furloughing nearly half of its workforce, while new data suggests American workers are more likely than ever to stay put. But first, earlier today, Gartner reported that employees are struggling with change. New Gartner HR research shows less than half of employees hit the change goals their organization set this year. That's a big miss. And it makes it clear that as companies roll out new tools, which is happening at an increasing rate due to AI, many employees are struggling to keep up.

Pete Newsome:

Gardner calls the current pace of change ungovernable. Their research shows 36% of business leaders say their teams are hesitant to adopt new initiatives as they would prefer to wait and see if the latest big change will even stick. And nearly four in ten say these shifts are a major source of stress. I attended the Staffing World Conference earlier this week, and I heard a number of references to employees being hesitant to embrace new AI tools in particular because it made them fear for their jobs. AI wasn't mentioned in the Gardner Press release, but I have to believe that's a major factor here. It's just a natural reaction.

Pete Newsome:

As a solution, Gardner said leaders need to stop overmanaging change and start building what they refer to as change reflexes. That's a new term for me, but it represents the skills that come into play when change is underway. Here's what they are: openness to new experiences, effectively managing time, understanding the context in which the business operates, using technology effectively, working well with others, and regulating emotions. They claim that employees who regularly practice these reflexes through repetition are three and a half times more likely to adapt successfully. That makes sense to me.

Pete Newsome:

If you're open to new experiences, then yes, you'll adapt better than someone who isn't. The same goes for handling your emotions or learning new technology. That seems pretty obvious. So while I don't believe this list of change reflexes is anything new, I agree that they are more important now than perhaps ever and will remain that way due to the rapid pace of change that is not going to slow down. Let's be realistic, businesses and work are evolving at a much faster pace than any time in our history. And this is a good list because it serves as a reminder that these attributes for both employers to be aware of and workers to be conscious of should be something you you improve. And I do think it's they're pretty universally applicable in any scenario. So there's a list of change reflexes, work on them, and you'll see better results.

Pete Newsome:

Now, while private companies are focused on handling too much change, the federal government is once again dealing with, well, no change at all. This shutdown persists, no end in sight so far. But the IRS is the latest casualty of the government shutdown. Reuters reports that 34,000 employees are being furloughed today. That's nearly half of the IRS workforce. And that means taxpayer call centers, IT operations, and most of the headquarters functions are now effectively shut down. The only staff remaining are those tied to enforcing President Trump's new tax and spending law, which was passed in July.

Pete Newsome:

The furloughs were triggered after the shutdown cross-of-five business day threshold that the agency had a contingency plan in place to handle, but now that that's passed, well, the furloughs had to kick in. And here's where things start to get really messy. A 2019 law requires federal employees to receive back pay after a shutdown, but the White House is disputing that interpretation. The administration has floated more than once the idea that not all furloughed employees should be paid, which sets up another potential legal fight and deepening the frustration among public workers, rightfully so.

Pete Newsome:

I'm not exactly sure why, but let's hope that doesn't actually kick in. That would be a real mess. Union leaders are pushing Congress really hard to end the standoff immediately. Everett Kelly of AFGE, which is the American Federation of Government Employees, said lawmakers should open the government today, whatever that entails. Okay, that would be wonderful, but it takes more than waving a magic wand to make it happen. The continuing resolution bill that's necessary to fund the government continues to fail in the Senate. I haven't heard any update on that today yet, but it doesn't seem like the sides are even close. And so I do know that President Trump has made lots of threats about permanent staff cuts and reductions in force, and now this back pay threat, apparently. But so far that's all it's been, and I don't know that anyone, even Trump himself, knows if that will actually happen at this point. Well, nothing involving the federal government would surprise me.

Pete Newsome:

In contrast, let's talk about employees staying put. According to Eagle Hill Consulting's latest employee retention index, workers aren't going anywhere right now. In fact, their index just hit a record high of 105.8, which signals Americans are more likely than ever to job hug. That's a term you've probably heard a lot lately. It means they're staying put for at least the next six months. Surprisingly to me, the biggest driver isn't fear or lack of other jobs, but compensation confidence, which jumped to a record level. Compensation confidence in this index indicates workers feel satisfied with their pay benefits and their chances to earn more.

Pete Newsome:

All of their retention indicators were up, which includes confidence in leadership and company culture. So maybe you're surprised to hear that, but largely employees like where they are. They have trust and faith in their current employer. That's a good thing. Now it wasn't all positive. There seems to be a generational split. Millennials and women are more likely to stay while Gen X and men are showing signs that they might be ready to move on. But that's easier said than done these days. We know that too, because quit rates are super low. We're not seeing an increasing number of job openings. So it seems like everyone realizes, and rightfully so, that this is not a great time to be looking for a job. But it's always good to see that most of the employees, at least in this survey, are happy where they are.

Pete Newsome:

We'll always take positivity where we can find it. And before we wrap up today, here's a fun fact: companies that allow remote work have a 25% lower employee turnover rate. Surprise not higher. Employees who are remote are off the charts, more satisfied with where they are. So thinking back to the employee retention index, I'd love to see the breakout of which companies are remote versus which ones are coming back to the office. We know a lot of RTO is happening lately. Doesn't make for happy employees if they like work at home. We know that.

Pete Newsome:

So if you want to lower your turnover rate, let your employees work for home. That's an easy solution. So thanks for listening today. Please like, subscribe to the podcast or the YouTube channel if you're watching there. Really appreciate it and share with anyone you think might be interested. Look forward to talking to you tomorrow.