Privatization of Welfare Services: A Review of the Literature. Avoiding Brain Drain


Close working relationships between governments and contractors create another set of potential challenges to privatization. In some instances, private organizations that have received government contracts begin recruiting employees of public agencies to access the talent necessary for implementing and operating programs (Sanger 2001). GAO research on senior staff turnover in child support and TANF programs offers evidence of this. Of senior program directors who left their positions from 1993 to 1998, 25 percent went to work for private contractors providing TANF or child support services. A major reason for these departures was the opportunity to earn a higher salary (GAO 1999). The loss of personnel--both management and those with specialized expertise in areas such as information technology--can affect government agencies' ability to design and monitor contracts effectively as well as to deliver services again once the contract expires.

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