A Cheat Sheet for Attracting Private Sector Talent to Government

Offering Purpose to Private Sector Talent

When I told my management consulting colleagues I was going to leave my job after one year to work for the US federal government on the implementation of the CHIPS Act, I was met with a range of reactions. Many struggled to understand why I would leave an industry known for speed, compensation, and prestige for a sector known for the opposite. But I felt that I had a unique opportunity to serve my country and lend my skills to a once-in-a-generation industrial policy effort to bring semiconductor manufacturing back to the United States.

During my time at the CHIPS Program Office (CPO), I was struck by the caliber of both the career civil servants and former private sector talent I worked alongside. It’s worth studying how the federal government enticed those in the prime of their career to become feds. Effective hiring is especially important as industrial policy cements itself as a norm. Future efforts will demand top talent. For CHIPS, those critical roles included a broad range of backgrounds, from career national security operators to procurement experts to public affairs staff to legal counsel. Leadership exercised its significant procedural and administrative authorities to develop an effective hiring process.

This piece focuses on private sector recruiting not because it is superior (it’s not!), but because program leaders often face more challenges getting private sector folks on board. Industrial policy also requires skills such as financial modelling and deal structuring that are more commonly developed in the private sector.

CHIPS, as other authors of Factory Settings have outlined, faced a burning need for private sector talent. Due to compensation differences, opaque hiring procedures, and poor awareness of what government work entails, government programs traditionally struggle to bring in private sector talent. But for a government program dedicated to incentivizing the domestic manufacturing of semiconductors, we simply needed financial sector professionals and technologists who could negotiate credibly against strong and well-capitalized counterparties. At the CHIPS Office, we needed to think intently about how we could best recruit and retain critical private sector talent.

In an age of resurgent interest in industrial policy, it remains critical that programs both grasp the need for a coterie of private sector talent to complement traditional government competencies, as well as understand relevant levers that may be pulled to activate potential future hires.

In looking across three senior hires from the program, we can see the unique capabilities that this talent can bring. Leading the Investment Office was Todd Fisher, who spent 30 years in finance, including 25 years at private equity giant KKR where he joined the C-Suite as Chief Administrative Officer. Given his background, he worked to provide an institutional counterweight to the companies CHIPS would find itself on the other side of the negotiating table from. Another example was Andy Kuritzkes, the program’s Chief Risk Officer. Having served as the Chief Risk Officer at State Street prior to Commerce, one of eight U.S. Global Systemically Important Banks (G-SIBS), Andy had the kind of experience in risk management for large organizations that we needed.

Not all of the talent that CHIPS sought was financial. A key part of the CHIPS effort was technical and specific to the semiconductor market. The program ultimately brought on Dan Kim, a former Chief Economist at memory chipmaker SK Hynix who had also spent time at the U.S. International Trade Commission. His background was essential for helping us understand how the leading semiconductor firms saw the market.

Though they were all senior in the program, these three hires are representative of the role that private sector talent can play in the execution of government programs. Foundationally, these hires were not replacing existing public sector competencies. Instead, these hires and the team members who worked alongside them were bringing capabilities that were critical to effective execution. As future programs face similar challenges requiring such technical and financial skillsets, implementers can use the following methods to proactively recruit talent to meet execution needs.

To better understand how CHIPS drew private sector talent, we surveyed and interviewed former CPO staff. A core set of replicable lessons emerged that can inform how future programs incentivize specialized financial and technical talent to lend their skills to government service:

• Communicate the opportunity for government service to provide outsized impact and experience

• Acknowledge talent’s desire to eventually leave government and facilitate stints in service

• Bring on anchor hires early to signal priorities

• Use non-traditional recruiting channels

• Appeal to the desire for a big mission

1. Communicate the opportunity for government service to provide outsized impact and experience

While hiring for CPO required facing the reputation of government work, there were genuine upsides for investment and technical roles in government relative to the private sector.

Because of the urgency of the CHIPS mandate, we needed everyone to give their all. Employees were empowered to engage with their counterparts at applicant companies (including large players Intel, TSMC, Micron, and Samsung) with significant agency and independence.

The volume of dealflow made it all the more necessary to give staff the latitude to act. One investment office team member drew a direct comparison between the work required at CHIPS and that of industry, noting that, “[At] the fund I was at before… we would do maybe 1–2 deals a year. I wanted a lot more reps, so I viewed [CHIPS] in the worst case as the fund that would do the most deals and deploy the most capital over the next 12 to 24 months.”

Another member of the Investment Office noted that CHIPS gave junior staff significant experience that they likely couldn’t get in the private sector. According to them, “In investment banking and financial services, people below the partner level rarely get direct exposure to the C-suite. But at CHIPS, because the team was so lean and the mandate was so significant, we were regularly in the room with senior leaders at key companies shaping the AI revolution.”

A large mandate with genuine empowerment repeatedly came up as a big draw. Staff were empowered to engage with companies, build cases for the CHIPS investment, and negotiate deals that both achieved national security objectives and protected the taxpayer. Future programs should emulate similar latitude and responsibility — private sector work is unlikely to offer such comprehensive training.

As one deal team member said, “What kept me there was…[that] the job was fascinating, and deal team members were genuinely empowered. We would consult with our subcommittees… but after all that consultation we went up to [the Transaction Review Committee] and spoke to the Secretary of Commerce…Our opinion wasn’t just respected. It was often the opinion that then led the charge.”

2. Acknowledge talent’s desire to eventually leave government and facilitate stints in service

Another point in CHIPS’s favor was that it was generally understood that the program would operate as a sprint model, with deal teams working for 12–24 months to get funds out the door before the program transitioned to portfolio management and monitoring of deployed capital. I remember one senior member of the investment team saying that we could think of the program as a two-year masters course in the semiconductor industry. The team understood that their commitment was time-bound by getting the deals out the door, and they could also be confident that they’d see a lot get done during their tenure. The combination of empowerment and ambitious milestones enticed candidates to leave their regimented career paths into what was, at the time, functionally a startup in government.

One junior member mentioned that they went in with the expectation of a brief period of very demanding work, and many expected to resume their private sector trajectories afterward. The lesson for future implementers is to design a program that allows hires to jump in for stints that are highly likely to bear fruit in their time on board. Over 80% of survey respondents noted that their ability to have significant policy impact and access to senior government leaders exceeded their expectations.

Some programs across the government already operate on a similar model. DARPA is well known for having term-limited program members rotate in and out of the agency to encourage innovation and risk-taking. While future industrial policy programs need not follow that exact model, there is much to gain from creating similar opportunities.

3. Bring on anchor hires early to signal priorities

Unsurprisingly, there was some concern about whether joining government would be a career risk. Almost one third of survey respondents worried that joining CPO would make it hard to return to the private sector. Others expressed misgivings about the length and complexity of the government hiring process, which is significantly more involved than those of the private sector. 42% of respondents mentioned the compensation gap as a particularly salient barrier to joining.

Some of these concerns were addressed through strong messaging and key early hires. Bringing on credible leaders set expectations and made other candidates more willing to join. One team member said of Todd Fisher, “When you see a government program that’s led by this individual with a very impressive senior career, who still has a ton of energy and wants to keep going and working and is willing to do that [full time], … it was easier to land that pitch.”

One early senior hire agreed, noting that, “While these early members were in policy advisory positions, they had strong business backgrounds from consulting, finance, and the startup world. I think that set the office up well for being able to attract talent from the private sector, including senior talent.” Survey data supports this; in our survey results, the majority of responses noted that senior private sector talent was most compelling in their choice to join the program.

Ultimately, strong private sector anchor hires can serve two purposes. Most importantly, anchor hires with impressive backgrounds in the private sector lend credibility and signal an opportunity for professional development and advancement.

Anchor hires also demonstrate that skills will translate (and are desired) across domains. These anchor hires serve as a recruiting tool and signal both the level of talent sought and the expectations for hires.

4. Use non-traditional recruiting channels

One recurring theme across our survey and interviews was the efficacy of CPO using underutilized channels to recruit employees. Multiple interviewees mentioned that direct outreach and public messaging helped gin up interest and assuage concerns. Programs typically only publish a USAJOBS posting and open a call for applicants. CPO took this a step forward by proactively seeking out talent through an organization-wide focus on recruiting and making these conversations two-way streets.

One podcast appearance in particular proved especially effective. Program Director Mike Schmidt and Chief Investment Officer Todd Fisher (both Factory Settings contributors) went on Odd Lots to talk about CPO’s objectives. Though recruiting wasn’t the point of the appearance, several members of the team applied after listening to it. One mentioned that the episode brought together all of his interests and further emphasized the importance of the CHIPS effort. Outreach through targeted media efforts can bear fruit — in this case, Odd Lots reached a niche audience interested in finance and economics that almost certainly would not have stumbled upon a USAJOBS posting.

Of our survey respondents, 74% said they learned about the opportunity through an existing connection. Other leads came through old friends, personal networks, public reporting, and even direct outreach from staffers as senior as Secretary Raimondo. CHIPS recruiting relied heavily on direct appeal, and one-on-one discussions about what the work would entail helped secure candidates.

The lesson here is that future programs should double down on direct pitches and take the opportunity to make program priorities clear. Traditional government recruiting (to the extent it exists) typically takes the form of hard-to-parse job descriptions on USAJOBS that fail to clearly articulate the role and responsibilities. This is a considerable hurdle for all roles, but especially so for private sector candidates who are not familiar with government hiring. By humanizing the recruiting process, including leveraging personal connections, media pathways that make a pitch to interested talent, and thinking tactically about how target talent finds traditional opportunities in their sector, future implementers can successfully recruit private sector expertise.

5. Appeal to the desire for a big mission

One standout theme across interviews was that nearly everyone who joined felt a strong drive to serve. Whether they had a legacy of family service, deep investment in US competitiveness, or an academic interest in national and economic security, colleagues said they were drawn to the work because it allowed them to leverage their skills to serve the American people and advance America’s ambitions. As AI continued to grow in the public consciousness, the importance of the mission became even more acute, funnelling more individuals with a latent interest in service to seek roles with CPO.

As one senior member of the CHIPS Investment team said, “The reason why I could make a very compelling case to people… was, number one, I rapidly concluded how vital the program was to our national and economic security.”

Another senior team member cited a family legacy of service, noting that when taking virtual meetings during the pandemic, some noticed a shadow box of the team member’s grandfather’s WWI Purple Heart and other medals in the background. They “would ask about it, and when I said I hadn’t served like they or my grandfather had, several told me it’s never too late and there are many ways to serve. While nothing like military service, CHIPS became my opportunity to contribute to America’s national and economic security.”

Other employees reported similar experiences: one member of the investment team who had studied government in college mentioned that they had always wanted to serve. They were eager for the opportunity to apply their private sector skills, even though they anticipated returning to industry down the line.

In interviews and survey results, colleagues expressed initial apprehension about joining the office given perceptions of bureaucratic morass and sclerotic systems that would get in the way of both their work and program goals. Many noted that some of the most helpful recruiting efforts directly mitigated these public perceptions about government service and emphasized that leadership was intent on minimizing these pitfalls and expanding government capabilities.

Part of this was downstream of personnel — as one investment team member told me, “I do remember my early interviews with [a senior Financial Structuring Team member], and given the loan background that he had and my debt background, it seemed like there was a very strong interest in tapping into the loan market and working with debt providers to do some creative deal structuring.”

Another former member said learning that CHIPS had Other Transactions Authority significantly assuaged their concerns about bureaucracy. “The fact that they had this toolkit and ways to be creative like OTA was incredibly attractive. For me, as someone interested in expanding the toolkit and determining what [future industrial policy interventions] should look like — this was an attractive thing for me.”

Across these interviews and based on my own experience, it was clear that many of my colleagues had a genuine, if latent, interest in doing some form of service in their professional career that CHIPS successfully activated. Furthermore, these interests needed to be activated for otherwise interested parties to make the move into government.

Some of this may be difficult to replicate for future programs — fewer initiatives will be able to appeal to urgency and criticality like CHIPS did. When I joined CPO, discussions about pandemic-era semiconductor shortages still lingered, OpenAI’s ChatGPT was in its first year of public release, and there was appetite for a strong policy for technological competition with China. On top of that, Chris Miller’s Chip War had been released the year prior, generating even more interest in the challenges of the semiconductor industry. Few other policy areas get a similar spotlight.

Nevertheless, other initiatives should not take for granted how energizing a grand challenge can be. That framing can get those in the private sector who are curious about public service into seats where they can make a public impact.

While CHIPS faced headwinds, team members still found the experience rewarding

Despite these upsides, CHIPS was not without friction. Survey respondents found the speed of decisionmaking, bureaucratic processes, and the quality of IT worse than they expected. While we worked to streamline procedures, there’s still much to be done — both in service of recruiting talent, to improve efficiency government-wide, and to build state capacity.

Nevertheless, 89% responded that they were either likely to or would definitely recommend to a colleague a stint in government service. A majority of respondents attested that their time at CPO expanded their professional networks and deepened their policy understanding, and it led half to their current roles. People also valued the teams this approach built: 79% of respondents said their colleagues exceeded expectations, with nobody bemoaning a lack of colleague quality.

As a whole, the conversations and surveys show private sector talent can be brought into government, aimed at an issue, and leverage their particular skillsets to effectively execute policy outcomes. Working alongside traditional government expertise, these hires can come to enjoy their stints in government, appreciate their colleagues, and recommend similar positions to others. With the levers CHIPS pulled, the program effectively incentivized critical talent to join the program. Following this playbook could open a pathway to creating a resilient pipeline of private sector talent to tackle public challenges. As national security takes on an increasingly commercial orientation, future programs will need to hire their own private sector operators to complement government expertise. While their recruiting strategy will need to be fit for purpose, the strategy CHIPS used to bring talent into government can serve as a starting point.