Post-Government Shutdown: Navigating the Aftermath
More than a third of federal workers were likely affected by the recent government shutdown, with ripple effects across every community and workplace. SHRM welcomes the agreement to end the federal government shutdown and restore stability for millions of workers, families, and employers nationwide. As federal operations resume, organizations and HR leaders face new challenges and opportunities to support their workforce, rebuild trust, and refocus on shared priorities that drive our nation forward.
What’s Changed: The Path Forward
With the federal government now reopened, agencies and organizations are transitioning back to full operations. Federal employees are returning to work, back pay will be processed, and suspended services are resuming.
However, the aftermath of the shutdown extends well beyond logistical recovery. In addition to widespread furloughs, thousands of federal workers received layoff notices during the shutdown; however, the Reductions in Force (RIFs) will be reversed and prevented until the end of the current budget agreement. This period has tested the resilience of our workforce and strained critical programs, but it also presents a crucial opportunity to reset, refocus, and rebuild around shared priorities.
Immediate Priorities for HR and Employers
Addressing these priorities promptly will help restore stability, rebuild trust, and ensure compliance across your organization.
Process Back Pay, Benefits, and Separation Packages
- Verify Payroll Records: Audit timekeeping and payroll data to ensure all furloughed and “excepted” employees are accurately identified.
- Coordinate with Payroll Providers: Work closely with payroll vendors or internal teams to process back pay efficiently, including overtime, differentials, and missed benefits contributions.
- Communicate Timelines: Clearly inform employees when to expect back pay, restored benefits, and any adjustments to deductions or leave balances.
- Address Benefits Reinstatement and Termination: Ensure health, retirement, and other benefits are reinstated for returning employees and properly terminated or transitioned for those laid off, including COBRA or other continuation options.
Communicate Updates and Next Steps
- Transparent Messaging: Provide timely, honest updates about the reopening process, organizational changes, and the scope of layoffs and their impact.
- Manager Toolkits: Equip managers with FAQs, talking points, and resources to address employee concerns — including those related to layoffs — and foster a supportive environment.
- Feedback Channels: Open avenues for employees to ask questions or raise issues, and respond promptly to build trust and address uncertainty.
Support Employee Well-Being
- Mental Health Resources: Promote access to Employee Assistance Programs (EAPs), counseling, and stress management resources.
- Flexible Work Arrangements: Consider temporary flexibility in schedules or remote work to help employees transition back to normal operations.
- Monitor Morale: Regularly check in with teams to assess morale and identify those who may need additional support, especially those impacted by layoffs.
- Recognize Resilience: Publicly acknowledge the challenges employees faced and express appreciation for their patience and adaptability.
Review Compliance and Legal Obligations
- Audit Actions Taken: Review all employment decisions made during the shutdown (e.g., furloughs, layoffs, leave, benefits changes) for compliance with federal and state laws.
- Legal Review: Work with legal counsel to monitor ongoing litigation and regulatory developments related to layoffs and shutdown actions; ensure all reduction-in-force (RIF) procedures were followed.
- Update Policies: Revise or clarify internal policies as needed based on lessons learned, including layoff protocols, severance, and rehire eligibility.
- Document Everything: Maintain thorough documentation of all actions, communications, and decisions related to layoffs, furloughs, and reopening for future reference and audits.
Document Lessons Learned and Update Contingency Plans
- Conduct Debriefs: Hold post-shutdown debrief sessions with HR, leadership, and key stakeholders to identify what worked, what needs improvement, and the impact of layoffs.
- Update Business Continuity Plans: Integrate new insights into your organization’s contingency and crisis management plans.
- Training and Preparedness: Plan training sessions for managers and staff to strengthen readiness for any future disruptions.
Key Impacts and Recovery Insights
The government shutdown had far-reaching effects on federal workers, private employers, contractors, and local communities. As operations resume, understanding the scope and depth of these impacts is essential for effective recovery.
Up to 1 in 3
non-USPS federal employees were put at risk by the shutdown.
64%
of organizations experienced disruption when the shutdown lasted more than a week.
49%
organizations that expect to miss yearly financial goals because the shutdown exceeded a week.
62%
expressed concern about employee well-being; 64% worried about morale and productivity.
80%
of workers anticipated increased stress; 76% expected morale to drop; 75% foresaw reduced focus and productivity.
89%
of workers believe local communities were harmed, eroding trust in institutions.
Source: SHRM, 2025: Direct and Indirect Impacts of an Impending Government Shutdown on Workers and Workplaces
Recovery Insights
As organizations transition from shutdown to full operations, targeted recovery actions are essential not only for restoring stability but also for driving business performance and resilience.
- Prioritize clearing backlogs in permits, investigations, and agency services to restore normal operations.
- Reassess financial forecasts and budgets in light of missed goals and delayed projects.
- Communicate employee support programs to address lingering stress, morale issues, and mental health challenges.
- Engage with local communities to rebuild trust and demonstrate commitment to stability and resilience.
Expert HR Guidance for What’s Next
New challenges and opportunities arise as the government reopens. SHRM advisors are here to help you navigate the post-shutdown landscape and build future resilience.
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SHRM’s Commitment
SHRM remains committed to supporting organizations, workers, and communities as we move beyond disruption and toward a more civil, innovative, and resilient future of work for all. We call for a renewed commitment to civility and constructive dialogue — values at the heart of strong workplaces and effective governance. SHRM’s E² initiative and ongoing advocacy efforts are designed to prepare the American workforce and economy for rapid and continuous change.
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