To address a shortage of manpower, the Federal Deposit Insurance Corp. and the contractors who assist federal regulators with failed banks are tapping former employees and executives of other failed institutions, sources in the industry say.

With the banking crisis taking an increasing toll on resources, the FDIC and the third parties it has hired to help wind down failed banks are retaining staff from seized banks to dispose of toxic assets and remediate collapses.

When banks are seized, federal regulators and (often) third-party contractors hire on a short-term basis bank employees—from receptionists to mid- and upper-level executives—to sell assets and help FDIC personnel dissect the bank for what went wrong, sources said.

But as banks continue to fail nationwide, contractors charged with disposing of assets and processing loans and the federal government are keeping some bankers to help sort out other crises, sources within the industry said.

Many employees of failed banks have skill sets lacking in the ranks of federal regulators, who can be freed for other duties. The FDIC has about 5,000 employees and has jurisdiction of some 8,300 banks.

Though the FDIC and contractors are likely choosing the best of the best, many in the industry said, what isn’t clear is if any of the people hired could face penalties from the government for any role in a bank’s collapse.

Twenty-one banks in Georgia have failed since 2008, more than any other state in the nation. More than 80 banks have failed nationwide. It is likely many more lenders will fail in the next few years.

Bobby Schwartz, a partner with Smith Gambrell & Russell LLP, said the FDIC has retained an executive officer from a former failed bank that was a client to help regulators evaluate and remediate assets at other failed banks.

It makes sense for the FDIC to target turnaround specialists or skilled bankers to remediate problems, Schwartz said.

“I think he anticipates the job will be full time for quite some time,” Schwartz said, declining to name the executive. “The promise to him was as banks continue to fail, and we have a way to go in the metro Atlanta area, he’d be on that team.”

A spokesman for the FDIC did not return repeated messages left for comment.

In this financial crisis, most institutions didn’t fail because of malfeasance, Schwartz said.