a

GAO

United States General Accounting Office

Report to Congressional Requesters

December 2003 HUMAN CAPITAL

Key Principles for 

Effective Strategic 

Workforce Planning

GAO-04-39
www.gao.gov/cgi-bin/getrpt?GAO-04-39.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact J. Christopher 

Mihm at (202) 512-6806 or mihmj@gao.gov. 

Highlights of GAO-04-39, a report to

congressional requesters 

December 2003

HUMAN CAPITAL

Key Principles for Effective Strategic 

Workforce Planning 

Strategic workforce planning addresses two critical needs: (1) aligning an 

organization’s human capital program with its current and emerging mission 

and programmatic goals and (2) developing long-term strategies for 

acquiring, developing, and retaining staff to achieve programmatic goals. 

While agencies' approaches to workforce planning will vary, GAO identified 

five key principles that strategic workforce planning should address 

irrespective of the context in which the planning is done: 

• Involve top management, employees, and other stakeholders in 

developing, communicating, and implementing the strategic workforce 

plan. 

• Determine the critical skills and competencies that will be needed to 

achieve current and future programmatic results. 

• Develop strategies that are tailored to address gaps in number, 

deployment, and alignment of human capital approaches for enabling 

and sustaining the contributions of all critical skills and competencies. 

• Build the capability needed to address administrative, educational, and 

other requirements important to support workforce planning strategies. 

• Monitor and evaluate the agency's progress toward its human capital 

goals and the contribution that human capital results have made toward 

achieving programmatic results. 

Strategic Workforce Planning Process

The federal government is in a 

period of profound transition and 

faces an array of challenges and 

opportunities to enhance 

performance, ensure 

accountability, and position the 

nation for the future. Effective 

results-oriented management of the 

government’s most valued 

resource—its people—is at the 

heart of this transition. 

This report is part of a large body 

of GAO work examining issues in 

strategic human capital 

management. Based on GAO’s 

reports and testimonies, review of 

studies by leading workforce 

planning organizations, and 

interviews with officials from the 

Office of Personnel Management 

and other federal agencies, this 

report describes the key principles 

of strategic workforce planning and 

provides illustrative examples of 

these principles drawn from 

selected agencies’ strategic 

workforce planning experiences. 
Page i GAO-04-39 Effective Strategic Workforce Planning

Contents

Letter 1

Results in Brief 2

Background 6

Principle 1: Involve Top Management, Employees, and Other 

Stakeholders in Developing, Communicating, and Implementing 

the Strategic Workforce Plan 8

Principle 2: Determine the Critical Skills and Competencies That 

Will Be Needed to Achieve the Future Programmatic Results 10

Principle 3: Develop Strategies Tailored to Address Gaps and 

Human Capital Conditions in Critical Skills and Competencies 

That Need Attention 14

Principle 4: Build the Capability Needed to Address Administrative, 

Educational, and Other Requirements Important to Supporting 

Workforce Strategies 17

Principle 5: Monitor and Evaluate the Agency’s Progress toward Its 

Human Capital Goals and the Contribution That Human Capital 

Results Have Made toward Achieving Programmatic Goals 20

Concluding Observations 24

Agency Comments 24

Appendix

Appendix I: Scope and Methodology 27

Related GAO Products 29

Figures Figure 1: Strategic Workforce Planning Process 3

Figure 2: Illustration of Principles for Involving Top Management 

and Others: PBGC’s Workforce Planning Efforts 10

Figure 3: Illustration of Principles for Determining Critical Skills 

and Competencies: NHGRI’s Workforce Planning 13

Figure 4: Illustration of Principles for Selecting Targeted Human 

Capital Strategies: DOL’s Development of an MBA 

Fellows Program 17

Figure 5: Illustration of Principles for Building the Capacity to 

Support Workforce Strategies: GSA’s Use of Human 

Capital Flexibilities 19

Figure 6: Illustration of Principles for Evaluating Contribution to 

Strategic Results: SSA’s Evaluation of Retirement-Related 

Strategies 23
Page ii GAO-04-39 Effective Strategic Workforce Planning

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Page 1 GAO-04-39 Effective Strategic Workforce Planning

United States General Accounting Office

Washington, D.C. 20548

A

December 11, 2003 Letr

Congressional Requesters

The Homeland Security Act of 2002,1 recent congressional hearings on 

proposals to reform the Department of Defense’s civilian personnel 

reforms, and reports by the Commercial Activities Panel chaired by the 

Comptroller General and the National Commission on the Public Service2

recognize the important contribution that a properly designed and 

implemented human capital program can make toward achieving an 

agency’s mission and strategic goals. Strategic workforce planning, also 

called human capital planning, focuses on developing long-term strategies 

for acquiring, developing, and retaining an organization’s total workforce 

(including full- and part-time federal staff and contractors) to meet the 

needs of the future. It is an essential element of the institutional 

infrastructure that each agency needs to ensure that its human capital 

program capitalizes on its workforce’s strengths and addresses related 

challenges in a manner that is clearly linked to achieving the agency’s 

mission and goals. 

This report is part of a large body of work examining issues in strategic 

human capital management. It was initially requested by Senators 

Lieberman and Thompson in their capacities as Chairman and Ranking 

Minority Member, respectively, of the Senate Committee on Governmental 

Affairs, and by the chairmen and ranking minority members of the 

committee’s two cognizant subcommittees. This report, as agreed with 

your offices, describes principles of human capital planning and provides 

illustrative agency examples that will contribute to effective agency 

strategic workforce plans. GAO, like other agencies across government, is 

in the midst of transforming how it does business. Accordingly, our 

internal strategic human capital planning efforts are consistent with the 

principles described in this report.

To develop this information, we reviewed documents from

(1) organizations with governmentwide responsibilities for or expertise in 

1

Pub. L. No. 107-296, November 25, 2002.

2

See Commercial Activities Panel, Improving the Sourcing Decisions of the Government

(Washington, D.C.: April 2002), and National Commission on the Public Service, Urgent 

Business for America: Revitalizing the Federal Government for the 21 st Century

(Washington, D.C.: Jan. 7, 2003). 
Page 2 GAO-04-39 Effective Strategic Workforce Planning

workforce planning models and tools, such as the Office of Personnel 

Management (OPM) and the National Academy of Public Administration 

(NAPA), and (2) federal agencies recommended by several sources as 

having promising workforce planning programs. We also reviewed our 

own reports and testimonies on human capital issues. In addition, we met 

with officials from these organizations concerning existing workforce 

planning models and lessons learned from their workforce planning 

experiences. We did not evaluate the effectiveness of specific workforce 

planning processes being used by the agencies we contacted. Appendix I 

provides additional information on our scope and methodology. A list of 

recent GAO products related to federal agencies’ management of human 

capital is included at the end of this report. 

Results in Brief Strategic workforce planning addresses two critical needs: (1) aligning an 

organization’s human capital program with its current and emerging 

mission and programmatic goals and (2) developing long-term strategies 

for acquiring, developing, and retaining staff to achieve programmatic 

goals. Agency approaches to such planning can vary with each agency’s 

particular needs and mission. The success of the workforce planning 

process that an agency uses can be judged by its results—how well it helps 

the agency attain its mission and strategic goals—not by the type of 

process used. Nevertheless, existing strategic workforce planning tools 

and models and our own work suggest that there are certain principles that 

such a process should address irrespective of the context in which 

planning is done. (See fig. 1.) These are as follows:

• involve top management, employees, and other stakeholders in 

developing, communicating, and implementing the strategic workforce 

plan; 

• determine the critical skills and competencies that will be needed to 

achieve current and future programmatic results;

• develop strategies that are tailored to address gaps in number, 

deployment, and alignment of human capital approaches for enabling 

and sustaining the contributions of all critical skills and competencies;

• build the capability needed to address administrative, educational, and 

other requirements important to support workforce strategies; and
Page 3 GAO-04-39 Effective Strategic Workforce Planning

• monitor and evaluate the agency’s progress toward its human capital 

goals and the contribution that human capital results have made toward 

achieving programmatic goals.

Figure 1: Strategic Workforce Planning Process

The following provides additional information on each of these principles. 

First, federal agencies are increasingly realizing that they must transform 

themselves to meet long-term fiscal, other domestic, and global challenges 

of the 21st century. Workforce planning that is linked to an agency’s 

strategic goals is one of the tools agencies can use to systematically 

identify the workforce needed for the future and develop strategies for 

shaping this workforce. We have found that efforts that address key 

organizational issues, like strategic workforce planning, are most likely to 

succeed if, at their outset, agencies’ top program and human capital leaders 

Involvement

of management

and employees

Workforce gap

analysis

Workforce strategies

to fill the gaps

Evaluation of 

and revisions

to strategies

Source: GAO.

Set strategic

direction

Build capability to support workforce strategies 
Page 4 GAO-04-39 Effective Strategic Workforce Planning

set the overall direction, pace, tone, and goals of the effort, and involve 

employees and other stakeholders in establishing a communication 

strategy that creates shared expectations for the outcome of the process. 

For example, Pension Benefit Guaranty Corporation (PBGC) officials used 

a team of managers working under the guidance of senior directors from 

PBGC’s budget, human resources, and other offices to involve executives, 

supervisors, and staff before developing a strategic workforce plan.

Second, an agency needs to define the critical skills and competencies that 

it will require in the future to meet its strategic program goals. Fiscal, 

demographic, technological, and other forces are challenging government 

agencies to change the activities that they perform and the goals that they 

must achieve, how they do their business, and even who does the 

government’s business. To effectively meet these challenges, an agency 

needs to (1) consult with key congressional and other stakeholders on its 

strategic goals and (2) identify the workforce skills and competencies that 

are critical to achieving these strategic goals and how the agency will 

obtain these requirements, including those that the agency will need to 

acquire, develop, and retain to meet its goals. For example, every 5 years, 

the National Human Genome Research Institute (NHGRI) of the National 

Institutes of Health (NIH) develops new strategic goals for the project and 

identifies the scientific and research capability needed to achieve these 

goals. National and international human genome experts discuss such 

topics as how skills critical to achieving previous goals may change during 

the coming years; how NHGRI should acquire, develop, and shape these 

skills within universities and NHGRI research programs; and whether 

NHGRI will need additional managers with similar scientific and medical 

skills to oversee research activities. NHGRI’s April 2003 strategic plan calls 

for the research institute to increase the number of scientists and managers 

with computational and clinical medical skills during the next 5 years. 

Third, once an agency identifies the critical skills and competencies that its 

future workforce must posses, it can develop strategies tailored to address 

gaps in the number, skills and competencies, and deployment of the 

workforce and the alignment of human capital approaches that enable and 

sustain the contributions of all critical skills and competencies needed for 

the future. Strategies include the programs, policies, and practices that will 

enable an agency to recruit, develop, and retain the critical staff needed to 

achieve program goals. In short, developing such strategies creates a road 

map for an agency to use to move from the current to the future workforce 

needed to achieve program goals. When considering strategies, it is 

important for agencies to consider the full range of flexibilities available 
Page 5 GAO-04-39 Effective Strategic Workforce Planning

under current authorities, as well as flexibilities that might need additional 

legislation before they can be adopted. In addition, agencies need to 

understand the strengths and weaknesses of their current human capital 

program and how the program can successfully use such flexibilities. For 

example, during its fiscal year 2001 preparation of fiscal year 2003 budget 

proposals, the Department of Labor (DOL) developed strategies for 

increasing the number of Master of Business Administration (MBA) 

graduates at the department. Its strategy, which was successfully included 

in its fiscal year 2003 budget, called for using recruitment bonuses and 

student loan repayments to recruit individuals with business degrees and a 

training program to acquaint those hired with the department. DOL has 

recently started training a second class of 17 MBA Fellows, in addition to 

the 13 enrolled in February 2003.

Fourth, as agencies develop tailored workforce plans and address 

administrative, educational, and other requirements that are important to 

support them, it is especially important to recognize practices that are key 

to the effective use of human capital authorities. These practices include 

educating managers and employees on the availability and use of 

flexibilities so that they are implemented openly, fairly, and effectively. For 

example, the General Services Administration (GSA) Region 3 built 

transparency and accountability into a newly designed award process by 

making lists of award amounts and frequencies (without personal 

identifiers) available to supervisors within the region so that they know 

how their use of such flexibilities compares with that of other regional 

supervisors.

Fifth, evaluating the contribution that the workforce plan makes to 

strategic results measures the effectiveness of the workforce plan and 

helps ensure that the strategies work as intended. This involves two 

activities: determining (1) how well the agency implemented its workforce 

plan and (2) the contribution that the implementation made toward 

achieving programmatic goals. These activities can also improve the 

effectiveness of workforce planning strategies and the overall workforce 

planning process by identifying shortfalls in performance and other 

improvement opportunities that can be incorporated into the next planning 

cycle. For example, the Social Security Administration (SSA) evaluated the 

results of its early retirement efforts to design future retirement programs 

that would shape the staffing levels available to attain the agency’s goals.

Each of the five organizations profiled in this report provided comments on 

a draft. All agreed with the information presented. GSA and other agencies 
Page 6 GAO-04-39 Effective Strategic Workforce Planning

also provided technical comments that we have incorporated as 

appropriate. In addition to its technical comments, GSA noted that our 

discussion of its workforce planning activities focuses on only the efforts 

of one GSA region. We have clarified this point in the report.

Background Strategic human capital management is a pervasive challenge facing the 

federal government. In January 2001, and again in January 2003, we 

identified strategic human capital management as a governmentwide highrisk area after finding that the lack of attention to strategic human capital 

planning had created a risk to the federal government’s ability to serve the 

American people effectively.3 As our previous reports have made clear, the 

widespread lack of attention to strategic human capital management in the 

past has created a fundamental weakness in the federal government’s 

ability to perform its missions economically, efficiently, and effectively.

4

 In 

the wake of extensive downsizing during the early 1990s, done largely 

without sufficient consideration of the strategic consequences, agencies 

are experiencing significant challenges to deploying the right skills, in the 

right places, at the right time. Agencies are also facing a growing number 

of employees who are eligible for retirement and are finding it difficult to 

fill certain mission-critical jobs, a situation that could significantly drain 

agencies’ institutional knowledge. Other factors such as emerging security 

threats, rapidly evolving technology, and dramatic shifts in the age and 

composition of the overall population exacerbate the problem. Such 

factors increase the need for agencies to engage in strategic workforce 

planning to transform their workforces so that they will be effective in the 

21st century.

There are a variety of models of how federal agencies can conduct 

workforce planning. For example, in 1999 OPM published a five-step 

model that suggests agencies define their strategic direction, assess their 

current and future workforces, and develop and implement action plans for 

3

U.S. General Accounting Office, High-Risk Series: An Update, GAO-01-263 (Washington, 

D.C.: January 2001), and High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: 

January 2003). 

4

See GAO-01-263 and U.S. General Accounting Office, Performance and Accountability 

Series – Major Management Challenges and Program Risks: A Governmentwide 

Perspective, GAO-01-241 (Washington, D.C.: January 2001). In addition, see the 

accompanying 21 reports (numbered GAO-01-242 through GAO-01-262) on specific 

agencies.
Page 7 GAO-04-39 Effective Strategic Workforce Planning

closing identified gaps in future workforce needs.

5

 Since then, NAPA and 

the International Personnel Management Association (IPMA) have 

reported on workforce models used by federal, state, and local 

governments and industry, and developed their own generic models.

6

 

Comparing these models, NAPA and IPMA found that the following four 

steps are generally common to strategic workforce planning efforts:

• examining future organizational, environmental, and other issues that 

may affect the agency’s ability to attain its strategic goals; 

• determining skills and competencies needed in the future workforce to 

meet the organization’s goals and identifying gaps in skills and 

competencies that an organization needs to address;

• selecting and implementing human capital strategies that are targeted 

toward addressing these gaps and issues; and

• evaluating the success of the human capital strategies.

However, they also reported that federal agencies often implement these 

steps differently and focus on a variety of issues based on their particular 

circumstances when preparing their strategic workforce plans. For 

example, faced with a long lead time to train employees hired to replace 

those retiring and an increasing workload, SSA focuses a large part of its 

workforce planning effort on estimating and managing retirements. Unlike 

SSA, PBGC officials faced a future workload that could rise or fall sharply. 

Consequently, PBGC focused its November 2002 workforce plan on 

identifying skills to manage the combined efforts of federal staff and 

contractors to address a volatile workload.

5

In October 2002, OPM released a Human Capital Assessment and Accountability 

Framework that expands on and integrates previous guidance on workforce planning, such 

as the 1999 model, and other human capital elements of the President’s Management 

Agenda. 

6

NAPA issued a 1999 report on federal workforce planning models and a 2000 report that 

provided guidance on implementing its version of a generic model. In 2002, IPMA published 

its version of a generic workforce planning model.
Page 8 GAO-04-39 Effective Strategic Workforce Planning

Principle 1: Involve 

Top Management, 

Employees, and Other 

Stakeholders in 

Developing, 

Communicating, and 

Implementing the 

Strategic Workforce 

Plan 

Planning, developing, and implementing workforce planning strategies, 

such as those that involve reshaping the current workforce through early 

separations, managed attrition, or increased hiring, can cause significant 

changes in how an agency implements its policies and programs. Our work 

on the human capital experiences of leading organizations as well as 

organizations that are undergoing major mergers and transformations has 

identified numerous lessons that can help federal agencies successfully 

implement strategic workforce planning strategies.7

 

These lessons include the following:

• Ensuring that top management sets the overall direction and 

goals of workforce planning. Top leadership that is clearly and 

personally involved in strategic workforce planning provides the 

organizational vision that is important in times of change; can help 

provide stability as the workforce plan is being developed and 

implemented; and provides a cadre of champions within the agency, 

including both political and career executives, to ensure that planning 

strategies are thoroughly implemented and sustained over time. It can 

also help integrate workforce planning efforts with other key 

management planning efforts, such as succession planning and 

information technology or financial management reforms, to ensure that 

such initiatives work together to achieve the agency’s goals. For 

example, we have reported that to be effective, succession planning 

needs the support and commitment of an organization’s top leadership.8

 

In other countries, government agencies’ top leadership (1) actively 

participates in the succession planning and management programs; 

(2) regularly uses these programs to develop, place, and promote 

individuals; and (3) ensures that these programs receive sufficient 

financial and staff resources and are maintained over time. 

7

See U.S. General Accounting Office, Results-Oriented Cultures: Implementation Steps to 

Assist Mergers and Organizational Transformations, GAO-03-669 (Washington, D.C.:

July 2, 2003); Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned for a 

Department of Homeland Security and Other Federal Agencies, GAO-03-293SP (Washington, 

D.C.: Nov. 14, 2002); Human Capital: Effective Use of Flexibilities Can Assist Agencies in 

Managing Their Workforces, GAO-03-2 (Washington, D.C.: Dec. 6, 2002); and Human 

Capital: Key Principles from Nine Private Sector Organizations, GAO/GGD-00-28

(Washington, D.C.: Jan. 31, 2000).

8

See U.S. General Accounting Office, Human Capital: Insights for U.S. Agencies from 

Other Countries’ Succession Planning and Management Initiatives, GAO-03-914

(Washington, D.C.: Sept. 15, 2003).
Page 9 GAO-04-39 Effective Strategic Workforce Planning

• Involve employees and other stakeholders in developing and 

implementing future workforce strategies. Agency managers, 

supervisors, employees, and employee unions need to work together to 

ensure that the entire agency understands the need for and benefits of 

changes described in the strategic workforce plan so that the agency 

can develop clear and transparent policies and procedures to implement 

the plan’s human capital strategies. Involving employees and other 

stakeholders on strategic workforce planning teams can develop new 

synergies that identify ways to streamline processes and improve 

human capital strategies and help the agency recognize and deal with 

the potential impact that the organization’s culture—the underlying 

assumptions, beliefs, values, attitudes, and expectations generally 

shared by an organization’s members—can have on the implementation 

of such improvements. Changes that recognize how they may challenge 

the existing culture, and include appropriate steps to deal with potential 

problems, are more likely to succeed than strategies that do not. 

• Establish a communication strategy to create shared 

expectations, promote transparency, and report progress. A 

communication strategy is especially crucial in the public sector where 

a full range of stakeholders and interested parties are concerned not 

only with what human capital and programmatic results will be 

achieved by a plan, but also with the processes that are to be used to 

achieve those results. For example, if a workforce plan calls for 

employing strategies that have not been extensively used before, such as 

recruitment bonuses, employees may be concerned about whether the 

processes will be followed consistently and fairly. In general, 

communication about the goals, approach, and results of strategic 

workforce planning is most effective when done early, clearly, and often 

and is downward, upward, and lateral. 

Figure 2 describes how PBGC adopted several of these lessons during its 

recent workforce planning efforts.
Page 10 GAO-04-39 Effective Strategic Workforce Planning

Figure 2: Illustration of Principles for Involving Top Management and Others: PBGC’s Workforce Planning Efforts

a

U.S. General Accounting Office, Pension Benefit Guaranty Corporation: Contracting Management 

Needs Improvement, GAO/HEHS-00-130 (Washington, D.C.: Sept. 18, 2000).

Principle 2: Determine 

the Critical Skills and 

Competencies That 

Will Be Needed to 

Achieve the Future 

Programmatic Results

It is essential that agencies determine the skills and competencies that are 

critical to successfully achieving their missions and goals. This is especially 

important as changes in national security, technology, budget constraints, 

and other factors change the environment within which federal agencies 

operate. For example, as discussed in our July 2003 report on the 

Department of Homeland Security’s (DHS) international cargo container 

programs, DHS Customs officials have developed two new programs for 

increasing the security of such cargo that require recruiting and training 

about 270 staff to work with their foreign counterparts at more than 40

PBGC adopted an innovative approach for involving top management that addressed its needs for both strategic workforce planning

and enhanced professional development of potential executives. In 2000, we reviewed PBGC's organizational structure and 

reliance on contractor employees, and recommended that the corporation conduct a comprehensive review of its future human 

capital needs that addressed the size of its workforce; its deployment; and the knowledge, skills, and abilities needed to meet its 

future mission needs.a PBGC officials agreed that it needed a strategic workforce planning study. They also believed that the 

corporation needed to strengthen its succession management program to prepare future managers. PBGC officials responded by 

creating a multifaceted program, which it calls the Leaders Growing Leaders Program, and made the program's participants 

responsible for developing and evaluating workforce planning information. In essence, potential future corporate leaders in the 

program became PBGC's strategic workforce planning team. PBGC officials believed that having its future leaders analyze 

planning issues and formulate corresponding strategies to address these issues provided an added incentive for the team to 

develop strategic workforce planning recommendations that its members, as future leaders, can successfully implement. 

The planning team has completed several workforce-planning analyses to respond to our recommendations. Under the guidance of 

an executive steering committee, which consists of senior directors of PBGC's largest departments and its planning, budget, and

human resources offices, the team has (1) studied other agencies' approaches to workforce planning; (2) examined current trends 

in PBGC's workload, employment, use of contractors, technology, and other factors; (3) developed for itself and the steering 

committee broad assumptions of how PBGC should address these issues in the future; and (4) interviewed over 100 executives, 

supervisors, and staff members to identify current and future skills needed in critical job occupations. PBGC officials identified 

these critical job occupations by analyzing the type of work conducted by PBGC and how technology and other factors were 

changing critical skills. 

During November 2002, the PBGC planning team completed a strategic workforce plan that (1) analyzed the differences between 

the current and future critical competencies identified in these interviews and (2) discussed with the steering committee possible 

recruitment, training, and retention strategies to address needs and opportunities. For example, the team identified six groups of 

critical competencies, such as competencies in project and contract management and information technology, that the corporation

was in the greatest danger of not having within 5 years. To address these potential gaps, the team recommended that the 

corporation explore such strategies as partnering with colleges and universities; using rotational assignments, mentoring, and 

establishing one-on-one instructional programs to expand training; and aligning performance plans and awards to its corporate 

goals. According to PBGC officials, by the end of 2003 the corporation will have implemented strategies to address these potential 

gaps and used the workforce plan to update its strategic goals for 2004 through 2008.
Page 11 GAO-04-39 Effective Strategic Workforce Planning

international ports and international shipping companies.9 To fully 

implement the new security programs, DHS expects to recruit and train 

candidates with diplomatic, language, and risk assessment (targeting) skills 

for 2- to 3-year permanent assignments at foreign ports. We reported that 

because some of these ports are in countries that our government 

considers hardship assignments, DHS faces a daunting challenge in 

attracting U.S. personnel with the necessary skills for these assignments. 

We recommended, among other improvements, that DHS develop human 

capital plans that clearly describe how the cargo security programs will 

meet the programs’ long-term demands for skilled staff. DHS officials 

agreed to develop human capital plans to better ensure the programs’ longterm success. 

We have reported on similar human capital challenges at other agencies. 

For example, in June 2003, we testified that the Securities and Exchange 

Commission (SEC) had failed to fill most of the new staff positions it 

needed to examine recent high-profile corporate failures and accounting 

scandals.10 In our June 2002 report on the Federal Energy Regulatory 

Commission (FERC),11 we stated that the increasing competitive nature of 

the natural gas and electricity markets made it critical that FERC have 

more staff members knowledgeable about how the energy markets work 

and how to regulate these markets effectively. However, FERC did not 

have a strategic human capital management plan to guide its efforts to 

transform its workforce and had not taken full advantage of the personnel 

flexibilities and tools available to federal agencies in addressing its human 

capital challenges. In April 2002, we found that the individual federal trade 

agencies responsible for negotiating, monitoring, and enforcing U.S. trade 

agreements lacked sufficient staff members with the expertise to perform 

the necessary economic, technical, and legal analyses for the new

9

U.S. General Accounting Office, Container Security: Expansion of Key Customs 

Programs Will Require Greater Attention to Critical Success Factors, GAO-03-770

(Washington, D.C.: July 25, 2003).

10U.S. General Accounting Office, Securities and Exchange Commission: Preliminary 

Observations on SEC’s Spending and Strategic Planning, GAO-03-969T (Washington, D.C.: 

July 23, 2003).

11U.S. General Accounting Office, Energy Markets: Concerted Actions Needed by FERC to 

Confront Challenges That Impede Effective Oversight, GAO-02-656 (Washington, D.C.: 

June 14, 2002).
Page 12 GAO-04-39 Effective Strategic Workforce Planning

agreements.12 The agencies collectively did not have sufficient expertise to 

adequately complete these analyses and faced problems with recruitment 

and high turnover rates. 

The scope of agencies’ efforts to identify the skills and competencies 

needed for their future workforces varies considerably, depending on the 

needs and interests of a particular agency. Whereas some agencies may 

decide to define all the skills and competencies needed to achieve their 

strategic goals, others may elect to focus their analysis on only those most 

critical to achieving their goals. The most important consideration is that 

the skills and competencies identified are clearly linked to the agency’s 

mission and long-term goals developed jointly with key congressional and 

other stakeholders during the strategic planning process. If an agency 

identifies staff needs without linking the needs to strategic goals, or if the 

agency has not obtained agreement from key stakeholders on the goals, the 

needs assessment may be incomplete and premature.

Agencies can use various approaches for making a fact-based 

determination of the critical human capital skills and competencies needed 

for the future. For example, PBGC collected qualitative information from 

interviews with agency executives and managers on the factors influencing 

the agency’s capability to acquire, develop, and retain critical skills and 

competencies. Another approach, used by the Department of the Army, is 

to collect extensive information from employee surveys on education, 

training, and other factors that may influence employees’ skills.13 

Information on attrition rates and projected retirement rates, fluctuations 

in workload, and geographic and demographic trends can also be useful. 

When estimating the number of employees needed with specific skills and 

competencies, it is also important to consider opportunities for reshaping 

the workforce by reengineering current work processes, sharing work 

among offices within the agency and with other agencies that have similar 

12U.S. General Accounting Office, Human Capital: Major Human Capital Challenges at 

SEC and Key Trade Agencies, GAO-02-662T (Washington, D.C.: Apr. 23, 2002).

13In August 2003, we reported that the Department of the Army had not taken adequate steps 

to ensure the reliability of projections made by its Civilian Forecasting System, which is a 

workforce planning model that the Department of Defense (DOD) and other agencies are 

considering adopting. The Department of the Army is taking actions that in effect 

implement our recommendation to better document the model’s forecasting capabilities. 

See U.S. General Accounting Office, DOD Personnel: Documentation of the Army's 

Civilian Workforce-Planning Model Needed to Enhance Credibility, GAO-03-1046

(Washington, D.C.: Aug. 22, 2003).
Page 13 GAO-04-39 Effective Strategic Workforce Planning

missions, and competitive sourcing. (See fig. 3 for information on NHGRI’s 

approach for determining critical skills and competencies needed to 

achieve its strategic goals.)

Figure 3: Illustration of Principles for Determining Critical Skills and Competencies: NHGRI’s Workforce Planning

Scenario planning is an approach that agencies have used to manage risks 

of planning for future human capital needs in a changing environment. As 

discussed in our April 2003 report on agencies’ efforts to integrate human 

capital strategies with their mission-oriented efforts,14 scenarios can 

describe different future environments that agencies may face. For 

example, after the terrorist attacks of September 11, 2001, and during the 

creation and implementation of DHS, senior U.S. Coast Guard officials 

reexamined five long-term scenarios developed in 1999 to describe 

different environments that could exist in the year 2020. In 1999, these 

scenarios had been the basis for agency leaders and planners to create 

NHGRI has identified the organizational capabilities it needs to achieve its goals in the human genome project. About every 5 years 

since 1990, the agency has developed new strategic goals for the project and identified the general organizational capabilities

needed to meet these goals. For example, based on the advice of federal and nonfederal managers, scientists, and other 

stakeholders, the agency has consistently determined it needs the capability to (1) develop and use state-of-the-art genetic analysis 

techniques, (2) create and manage very large databases of genetic information, and (3) explore the ethics of developing detailed 

genetic maps of people. However, as the science has matured, NHGRI has increasingly emphasized the capability to develop 

medical applications of genetic discoveries. As research priorities have changed, NHGRI has also identified and developed the inhouse capability to provide and manage financial grants to support pre- and postdoctoral researchers at universities and for its own 

in-house research program. 

Accomplishing all of its agreed-upon strategic objectives, NHGRI recently reexamined the program’s future research goals and 

associated organizational capabilities. From July 2001 through November 2002, NHGRI officials conducted a series of workshops 

and solicited advice from national and international experts to (1) review the U.S. program’s past scientific successes, (2) define new 

strategic research goals and areas of emphasis, and (3) identify the scientific and research capability needed to achieve these goals. 

Program officials and scientists participating in the planning workshops discussed such topics as how skills critical to achieving 

previous goals may change during the coming years; how NIH should acquire, develop, and shape these skills within universities and 

NIH research programs; and whether NHGRI will need additional managers with similar scientific and medical skills to oversee 

research activities. According to NHGRI officials, workshop participants called for an even greater reliance in the future on scientists 

with computational and clinical medical skills. The program’s April 2003 strategic plan includes ambitious goals for translating the 

wealth of existing genetic information and technology into medical applications that will significantly improve human health care and 

calls for an increased number of scientists with such skills.

14U.S. General Accounting Office, Human Capital: Agency Actions to Integrate Human 

Capital Approaches with Strategies for Accomplishing Organizational Missions, GAO-03-

446 (Washington, D.C.: Apr. 11, 2003).
Page 14 GAO-04-39 Effective Strategic Workforce Planning

operational and human capital strategies that they thought would work 

well for the U.S. Coast Guard in each independent scenario. After 

September 11, 2001, agency officials reviewed the scenarios to determine 

whether additional scenarios were needed in light of the attacks and 

decided to (1) create new long-term scenarios to guide planning beyond 

2005 and (2) generate two scenarios with an 18-month horizon to guide 

short-term operational and human capital planning. Similarly, to prepare 

its 2002 strategic workforce plan, PBGC used scenario analysis to 

determine how the scope and volume of its activities might change in the 

next 5 years. The strategic workforce plans these organizations developed 

identify gaps in workforce skills or competencies that they need to fill to 

meet the likely scenarios rather than planning to meet the needs of a single 

view of the future. U.S. Coast Guard and PBGC managers believe that by 

using multiple scenarios they gain flexibility in determining future 

workforce requirements. 

Principle 3: Develop 

Strategies Tailored to 

Address Gaps and 

Human Capital 

Conditions in Critical 

Skills and 

Competencies That 

Need Attention

Our March 2002 strategic human capital model stressed the importance of 

agencies developing human capital strategies—the programs, policies, and 

processes that agencies use to build and manage their workforces—that 

are tailored to their unique needs. Applying this to strategic workforce 

planning means that agencies (1) develop hiring, training, staff 

development, succession planning, performance management, use of 

flexibilities, and other human capital strategies and tools that can be 

implemented with the resources that can be reasonably expected to be 

available and (2) consider how these strategies can be aligned to eliminate 

gaps and improve the contribution of critical skills and competencies that 

they have identified between the future and current skills and 

competencies needed for mission success. For example, we reported that 

to manage the succession of their executives and other key employees, 

agencies in Australia, Canada, New Zealand, and the United Kingdom are 

implementing succession planning and management practices that protect 

and enhance organizational capacity.15 Specifically, their initiatives identify 

high-potential employees from multiple organizational levels early in their 

careers as well as identify and develop successors for employees with 

critical knowledge and skills. In addition, because they are facing 

challenges in the demographic makeup and diversity of their senior 

executives, agencies in other countries use succession planning and 

15GAO-03-914.
Page 15 GAO-04-39 Effective Strategic Workforce Planning

management to achieve a more diverse workforce, maintain their 

leadership capacity as their senior executives retire, and increase the 

retention of high-potential staff.

Also, in June 2003, we testified that although the Federal Bureau of 

Investigation (FBI) has taken some steps to address short-term human 

capital needs related to implementing its changed priorities, as well as 

completing a framework for a revised strategic plan, it has not completed a 

strategic human capital plan.16 We observed that the FBI should build a 

more long-term approach to human capital by completing a strategic 

human capital plan that outlines, among other things, the results of a datadriven assessment of its needs for critical skills and competencies. Such an 

analysis could become the basis for FBI officials deciding how to maximize 

the use of available human capital flexibilities as a strategy for recruiting 

and retaining agents with critical skills, intelligence analysts, and other 

critically needed staff.

Our 2002 strategic human capital model identifies aspects of human capital 

management that enable agencies to maximize their employees’ 

contributions, such as (1) the continuing attention of senior leaders and 

managers to valuing and investing in their employees; (2) an investment in 

human capital approaches that acquires, develops, and retains the best 

employees; and (3) the use of performance management systems that elicit 

the best results-oriented performance from the staff, and indicators to 

measure the effectiveness of human capital approaches.17,18 Before 

beginning to develop specific workforce strategies, an agency can assess 

these aspects of its human capital approach, using OPM’s Human Capital 

Assessment and Accountability Framework, which OPM developed in 

conjunction with the Office of Management and Budget (OMB) and GAO; 

16U.S. General Accounting Office, FBI Reorganization: Progress Made in Efforts to 

Transform, but Major Challenges Continue, GAO-03-797T (Washington, D.C.: June 18, 

2003).

17Our March 2002 exposure draft identified these factors, plus strategic workforce planning, 

as cornerstones of an effective human capital program. See U.S. General Accounting Office, 

A Model of Strategic Human Capital Management, GAO-02-373SP (Washington, D.C.: 

Mar. 15, 2002).

18There are also individual-related factors that affect an employee’s capability to contribute 

to an agency’s goal. For example, an agency needs individuals who have, in addition to 

specific skills and competencies, the motivation necessary to capitalize on their inherent 

skills and the resiliency to positively respond to temporary setbacks that may arise in the 

course of their work.
Page 16 GAO-04-39 Effective Strategic Workforce Planning

our model; and other tools. The results will help agencies develop a sense 

of the obstacles and opportunities that may occur in meeting their critical 

workforce needs For example, an agency that attempts to develop creative 

and innovative strategies will have a difficult time implementing the 

strategies if its assessment concludes that its overall human capital 

approach (1) does not effectively value people as assets whose value can 

be enhanced and (2) is not results oriented.

Much of the authority that agencies’ leaders need to tailor human capital 

strategies to their unique needs is already available under current laws and 

regulations. Therefore, in setting goals for its human capital program and 

developing the tailored workforce planning strategies to achieve these 

goals, it is important for agencies to identify and make use of all the 

appropriate administrative authorities to build and maintain the workforce 

needed for the future. As our December 2002 report states, this will involve 

agencies reexamining the flexibilities provided to them under current 

authorities, and identifying existing flexibilities that they could use more 

extensively, to develop workforce planning strategies.19 These flexibilities 

may include providing early separation and early retirement incentives 

authorized by the Homeland Security Act of 2002, recruitment and 

retention bonuses and allowances, alternative work schedules, and special 

hiring authorities to recruit employees with critical skills.20 (See fig. 4 for 

information on DOL’s use of flexibilities to recruit individuals with business 

skills.)

19GAO-03-2.

20For an expanded list of human capital flexibilities available to federal agencies, see GAO03-2 and U.S. Office of Personnel Management, Human Resources Flexibilities and 

Authorities in the Federal Government (Washington, D.C.: July 25, 2001).
Page 17 GAO-04-39 Effective Strategic Workforce Planning

Figure 4: Illustration of Principles for Selecting Targeted Human Capital Strategies: DOL’s Development of an MBA Fellows 

Program

Principle 4: Build the 

Capability Needed to 

Address 

Administrative, 

Educational, and Other 

Requirements 

Important to 

Supporting Workforce 

Strategies 

In a December 2002 report, we identified key practices that agencies need 

to employ to effectively take advantage of existing and new human capital 

authorities.21 Two of these practices—ensuring that the use of flexibilities 

is part of an overall human capital strategy and ensuring stakeholder input 

in developing flexibilities-related policies and procedures—are intrinsic to 

effective workforce planning and have already been discussed. However, 

as agencies plan how to implement specific workforce strategies that 

include flexibilities, it is important that they also consider other practices 

that are important to the effective use of flexibilities. These include the 

following:

• Educate managers and employees on the availability and use of 

flexibilities. Managers and supervisors can be more effective in using 

human capital strategies that involve new flexibilities, such as 

recruitment bonuses, if they are properly trained to identify when they 

Like many agencies, DOL faces the challenge of acquiring needed skills and competencies to keep pace with changing conditions 

and to improve effectiveness of its programs. To address this challenge, it has formulated a strategy for using existing personnel 

flexibilities for recruiting individuals with advanced business administration skills, and presented a business case for this and other 

human capital initiatives in its fiscal year 2003 budget request approved by the Congress.

Specifically, early in fiscal year 2002, the Secretary of Labor determined that, to transform itself into a more business-like 

organization, the department needed to (1) recruit individuals who possessed extensive business skills in order to develop such

critical competencies as marketing, quantitative analysis, and strategic thinking and (2) train these individuals in the intricacies of 

operating the department’s many worker protection, compensation, and employment programs. After considering several human 

capital approaches for doing this, such as expanding recruiting efforts at universities to attract more business graduates and rotating 

individuals with business skills from other agencies to short assignments in the department, DOL officials decided to develop a

program that combined aspects of both types of programs. 

DOL’s resulting MBA Fellows Program, which began in February 2003, includes (1) goals for the year of recruiting 15 to 20 MBA 

graduates and other individuals with comparable business experience, (2) strategies to facilitate recruiting these individuals, and (3) a 

new 2-year program designed to provide these new hires with experiences in a broad variety of departmental programs. Strategies for 

hiring these individuals include establishing relationships with universities and professional organizations that have strong business 

programs to advertise DOL’s hiring program, and using existing flexibilities, such as recruitment bonuses and student loan 

repayments, to improve the competitiveness of the department’s employment offers. The new Fellows Program includes rotation 

assignments throughout DOL, development of individualized plans to enhance leadership and business experiences, and matching 

program participants with mentors. In July 2003, DOL hired a second class of 17 MBA Fellows to join the 13 hired in February.

21GAO-03-2.
Page 18 GAO-04-39 Effective Strategic Workforce Planning

can be used and how to use the agency’s processes for ensuring 

consistency, equity, and transparency. To avoid confusion and 

misunderstandings, it is also important to educate employees about how 

the agency uses human capital flexibilities and employee rights under 

policies and procedures related to human capital.22

• Streamline and improve administrative processes. It is important 

that agencies streamline administrative processes for using flexibilities 

and review self-imposed constraints that may be excessively process 

oriented. Although sufficient controls are important to ensure 

consistency and fairness, agency officials developing a workforce 

strategy that uses flexibilities should look for instances in which 

processes can be reengineered. 

• Build transparency and accountability into the system. Clear and 

transparent guidelines for using specific flexibilities, and holding 

managers and supervisors accountable for their fair and effective use, 

are essential to successfully implementing workforce strategies. 

Guidelines can be used to (1) provide well-defined and documented 

decision-making criteria for using flexibilities and help ensure that they 

are consistently applied and (2) minimize managers’ and supervisors’ 

potential reluctance to use flexibilities by addressing their concerns that 

without guidelines, employees may see them as unfairly applying the 

flexibilities. An agency can also use a results-oriented performance 

management system to reinforce managers’ accountability for 

implementing human capital strategies. In October 2000, OPM amended 

regulations to require agencies to, among other things, appraise 

executive performance by balancing organizational results with areas 

such as employee perspective. We reported on selected agencies’ 

implementation of a set of balanced performance expectations for 

senior executives and identified examples of executives’ expectations. 23 

Examples of these performance expectations were to “help attract and 

retain well-qualified employees” and “ensure workforce has skills 

22For guidance on possible education efforts, see U.S. General Accounting Office, Human 

Capital: A Guide for Assessing Strategic Training and Development Efforts in the Federal 

Government, GAO-03-893G (Washington, D.C.: July 1, 2003).

23U.S. General Accounting Office, Results-Oriented Cultures: Using Balanced Expectations 

to Mange Senior Executive Performance, GAO-02-966 (Washington, D.C.: Sept. 27, 2002). 

See also, GAO-03-669 and U.S. General Accounting Office, Results-Oriented Cultures: 

Creating a Clear Linkage between Individual Performance and Organizational Success, 

GAO-03-488 (Washington, D.C.: Mar. 14, 2003). 
Page 19 GAO-04-39 Effective Strategic Workforce Planning

aligned with the agency’s objectives.” (See fig. 5 for information on GSA 

Region 3’s efforts to build the capacity to support its workforce 

strategies.)24

Figure 5: Illustration of Principles for Building the Capacity to Support Workforce Strategies: GSA’s Use of Human Capital 

Flexibilities

24As with the other illustrative examples, the example addresses only one part of GSA’s 

overall workforce planning efforts.

GSA’s Philadelphia Regional Office (Region 3) has used a variety of means to educate stakeholders and managers about human 

capital flexibilities and to involve them in identifying ways to simplify their use. For example, it has done the following:

· Established a Human Resources Council, which is composed of the human resources director and representatives of various 

 GSA offices, to discuss human capital policies and practices in the region, such as alternative work arrangements and incentive 

 awards. 

· Conducted Human Resources Solutions Series training to educate supervisors on the existence and use of human capital 

 flexibilities. The training includes topics such as employee leave and work schedules, options for dealing with performance and 

 conduct problems, and balancing managerial flexibility and accountability under merit system principles. 

· Revised administrative approval processes for granting employees on-the-spot cash awards ranging from $50 to $2,000. 

 Previously, agency supervisors were required to complete lengthy justifications and send these forms to the personnel office for 

 review. According to the human resources manager, the perceived burdens of the previous administrative process led to very 

 few awards being granted. Now, according to GSA managers and supervisors, by accessing GSA’s intranet Web site, an agency 

 supervisor can complete the award initiation process within minutes and on the next business day receive a certificate to present 

 to the employee that shows what the award is for and when the employee can expect the money in his or her paycheck.

· Built transparency and accountability into the revised award process by making lists of award amounts and frequencies (without 

 personal identifiers) available to supervisors within the region so that they know how their use of such flexibilities compares with 

 that of other regional supervisors.

· Started using GSA’s intranet Web site and an employee newsletter to distribute information about employees’ rights and related 

 personnel policies and procedures.
Page 20 GAO-04-39 Effective Strategic Workforce Planning

Principle 5: Monitor 

and Evaluate the 

Agency’s Progress 

toward Its Human 

Capital Goals and the 

Contribution That 

Human Capital Results 

Have Made toward 

Achieving 

Programmatic Goals

High-performing organizations recognize the fundamental importance of 

measuring both the outcomes of human capital strategies and how these 

outcomes have helped the organizations accomplish their missions and 

programmatic goals. Performance measures, appropriately designed, can 

be used to gauge two types of success: (1) progress toward reaching 

human capital goals and (2) the contribution of human capital activities 

toward achieving programmatic goals.25 Identifying both types of measures, 

and discussing how the agency will use these measures to evaluate the 

strategies before it starts to implement the strategies, helps agency officials 

think through the scope, timing, and possible barriers to evaluating the 

workforce plan.26 Periodic measurement of an agency’s progress toward 

human capital goals and the extent that human capital activities 

contributed to achieving programmatic goals provides information for 

effective oversight by identifying performance shortfalls and appropriate 

corrective actions.

For example, a workforce plan can include measures that indicate whether 

the agency executed its hiring, training, or retention strategies as intended 

and achieved the goals for these strategies, and how these initiatives 

changed the workforce’s skills and competencies. It can also include 

additional measures that address whether the agency achieved its program 

goals and the link between human capital and program results. An agency’s 

evaluation of its progress implementing human capital strategies would use 

the first set of measures to determine if the agency met its human capital 

goals and identify the reasons for any shortfalls, such as whether the 

agency’s implementation plan adequately considered possible barriers to 

achieving the goals, established effective checkpoints to allow necessary 

adjustments to the strategy, and assigned people with sufficient authority 

and resources. Further evaluation may determine that although the agency 

achieved its workforce goals, its human capital efforts neither significantly 

25The Homeland Security Act of 2002 requires that OPM design a set of systems that include 

appropriate metrics for assessing agencies’ human capital management, including metrics 

for closing skill gaps in mission-critical occupations and aligning human capital strategies 

with the missions, goals, and organizational objectives of agencies. 

26In creating and using performance measures, the number of measures for each strategy 

should be limited to the most vital. As our previous work evaluating the results of agencies’ 

Government Performance and Results Act (GPRA) efforts has noted, those vital measures 

should cover the key performance dimensions that will enable an organization to assess the 

success of the human capital strategy. Organizations that seek to manage large numbers of 

performance measures may risk creating confusing excess data that will obscure rather 

than clarify performance.
Page 21 GAO-04-39 Effective Strategic Workforce Planning

helped nor hindered the agency from reaching its programmatic goals. 

This could occur if an agency misjudged the relationship between human 

capital and programmatic goals when developing workforce plans and 

consequently has mistakenly estimated the magnitude of changes in human 

capital strategies that were needed to achieve program goals. These results 

could lead to the agency revising its human capital goals to better reflect 

their relationship to programmatic goals, redesigning programmatic 

strategies, and possibly shifting resources among human capital initiatives 

during the next planning cycle.

Developing meaningful outcome-oriented performance goals and collecting 

performance data to measure achievement of these goals is a major 

challenge for many federal agencies. 27 Performance measurement tends to 

focus on regularly collected data available on direct products and services 

provided by a program, such as the number of staff trained to carry out an 

activity. In cases where outcomes are not quickly achieved or readily 

observed, such as assessing the impact a training program has on achieving 

an agency’s goals, performance measurement is more complex.28

Federal agencies in general have experienced difficulties in defining 

practical and meaningful measures that assess the impact human capital 

strategies have on programmatic results. For example, in its fiscal year 

2003 performance plan, the Federal Emergency Management Agency 

identified goals of streamlining its organization and developing its 

workforce, but listed no measures to gauge progress for either goal.29 In 

contrast, the Environmental Protection Agency’s (EPA) fiscal year 2003 

performance plan includes measures of the agency’s efforts to achieve 

activity-oriented human capital goals, such as implementing a workforce 

planning model at five offices by the end of the year and completing a 

comprehensive pay review. These performance measures provide a base 

upon which EPA can seek to gauge how well its human capital efforts help 

the agency to achieve its programmatic goals.

27U.S. General Accounting Office, Results-Oriented Government: Using GPRA to Address 

21st Century Challenges, GAO-03-1166T (Washington, D.C.: Sept. 18, 2003).

28GAO-03-893G.

29U.S. General Accounting Office, Performance and Accountability: Reported Agency 

Actions and Plans to Address 2001 Management Challenges and Program Risks, GAO-03-

225 (Washington, D.C.: Oct. 31, 2002).
Page 22 GAO-04-39 Effective Strategic Workforce Planning

The challenge faced by EPA and other agencies in using such measures is 

that there is not always a clear link between specific human capital 

strategies and strategic programmatic outcomes. This is partly because 

there may be multiple causes of a specific outcome, only one of which is 

related to a targeted human capital strategy, and unforeseen circumstances 

that affect implementation of a strategy. Our recent testimony on human 

capital challenges at the SEC and key trade agencies illustrates the 

practical difficulties that agencies may encounter.30 We testified that during 

2001, U.S. trade agencies increased staff levels to address insufficient 

monitoring and enforcement of trade agreements. However, we noted that 

measuring the effectiveness of this strategy might be difficult because the 

agencies’ workloads in other areas continue to grow, which could cause 

them to shift resources intended for trade compliance to other program 

areas.31 If shifts in resources occur, the agencies may not be able to 

improve the effectiveness of trade compliance efforts, even though the 

human capital strategy initially succeeded in acquiring additional 

resources.

OPM’s Human Capital Assessment and Accountability Framework, 

developed in conjunction with OMB and GAO, presents consolidated 

guidance on standards for success and performance indicators that 

agencies can refer to as they transform their strategic human capital 

management programs. For example, it includes such strategic workforce 

planning indicators as whether agencies use best practices to determine 

workloads and resource needs and have documented strategies for 

workforce planning that define roles, responsibilities, and other 

requirements of the strategies.32 As we stated in January 2003, the 

framework represents a promising step that can improve agencies’ human 

capital systems.33 Agencies can use its indicators as a basis for developing, 

implementing, and evaluating their workforce planning processes. 

Generally, agencies will need more specific indicators to measure the 

30Our review focused on the human capital challenges facing the SEC, the Office of the U.S. 

Trade Representative, and trade-related components of the Departments of Commerce and 

Agriculture.

31GAO-02-662T.

32For more information on OPM’s Human Capital Assessment and Accountability 

Framework, visit http://apps.opm.gov/HumanCapital/tool/purpose.cfm.

33U.S. General Accounting Office, Major Management Challenges and Program Risks: 

Office of Personnel Management, GAO-03-115 (Washington, D.C.: January 2003).
Page 23 GAO-04-39 Effective Strategic Workforce Planning

success of their workforce plans. (See fig. 6 for information on SSA’s 

evaluation of retirement-related workforce strategies.)

Figure 6: Illustration of Principles for Evaluating Contribution to Strategic Results: SSA’s Evaluation of Retirement-Related 

Strategies

a

U.S. General Accounting Office, SSA Customer Service: Broad Service Delivery Plan Needed to 

Address Future Challenges, GAO/T-HEHS/AIMD-00-75 (Washington, D.C.: Feb. 10, 2000).

b

The most recent update, completed in 2000, shows that since the voluntary retirement program was 

refocused on addressing the expected retirement peak, SSA’s projected number of retirements has 

decreased. About 37 percent of the workforce is projected to retire through 2010, compared with the 

1998 projections that showed that about 42 percent would retire during the same period. Furthermore, 

400 to 500 fewer employees will be retiring during the peak years of demand for SSA’s services.

SSA is using the results of several studies of retirement trends in the agency to focus its voluntary retirement program. As we

discussed in our February 2000 testimony, SSA conducted a study that predicted staff retirements and attrition by year from 1999 

through 2020, as well as by major job position and agency component.a Its study showed that two factors would converge by the end 

of the decade: an expected increase in demand for services as baby boomers reach retirement age and the imminent retirement of a 

large part of the agency’s workforce. For example, the study projected that nearly 70 percent of managers would be eligible to retire 

by 2010, with the majority retiring during the peak years of 2007 through 2009. During these peak retirement years, SSA expected to 

lose about 3,000 employees per year, which would be more than double the average retirement rate from the previous decade. SSA 

officials believed that if the retirement wave were left to run its course unabated, the agency would be faced with an institutional 

knowledge gap coupled with an increased demand to recruit and train new employees that would be difficult and expensive to meet. 

In order to have experienced employees in critical areas during the peak workload years, after the 1998 study SSA revised the 

eligibility requirements of its voluntary retirement program to focus on mitigating the effects of projected peak year retirements. In 

contrast with earlier versions of the program, which were targeted to employees in noncritical administrative and managerial 

positions, the redesigned early retirement program was expanded to include all employees who provide direct service to the public. 

However, SSA has generally excluded employees with substantial workloads and skills critical to achieving its mission, such as 

administrative law judges, from participating in the early retirement program. 

SSA officials evaluate the combined impact of the redesigned early retirement program and other factors during both their annual 

assessment and strategic planning cycles. At the end of each fiscal year, SSA measures the number of actual retirements, compares 

it to the previously projected number, and considers how these numbers affect the future retirement wave. SSA also updates its 

retirement wave study triannually.b Based on results from the annual and triannual studies, SSA determines possible strategies for 

managing the projected retirement wave, including again offering voluntary retirements. If it decides to offer additional voluntary 

retirements, SSA presents a business case to OPM demonstrating its need for early retirement authority. However, SSA officials have 

found that personal considerations, legislative changes in retirement systems, economic conditions, and other factors contribute to an 

employee’s decision to retire. Because of the variety and significance of these factors, SSA has concluded that it cannot clearly 

identify a cause-and-effect relationship between its retirement incentives and actual retirements.

SSA’s efforts to monitor the number of employees who are retiring is part of a broader effort that the agency believes will help it 

transition its workforce to effectively deliver services to its current and future customers. We have not evaluated SSA’s implementation 

of its broader workforce transition effort. However, as we stated in our January 2003 report on SSA’s management challenges, SSA 

needs to consider decisions on early retirements and other strategies to build its workforce within the context of a concrete service 

delivery plan that provides details on how and when it will provide service in the future.c
Page 24 GAO-04-39 Effective Strategic Workforce Planning

c

U.S. General Accounting Office, Major Management Challenges and Program Risks: Social Security 

Administration, GAO-03-117 (Washington, D.C.: Jan. 1, 2003).

Concluding 

Observations

There is an increasing awareness that federal agencies need to transform 

themselves into more efficient, results-oriented organizations if they are to 

meet the many fiscal, management, and policy challenges of the 21st 

century. To meet these challenges, federal managers will need to direct 

considerable time, energy, and targeted investments toward efforts that 

make the best use of the government’s most important resource—the 

people that agencies employ now and in the future. They will also need 

effective strategic workforce planning to identify and focus these 

investments on the long-term human capital issues that most affect their 

ability to attain mission results. The principles presented here can enhance 

the effectiveness of an agency’s strategic workforce planning by helping the 

agency focus on the issues it needs to address, the information it needs to 

consider, and the lessons that it can learn from other organizations’ 

experiences. By doing so, agencies can better ensure that their strategic 

workforce planning processes appropriately address the human capital 

challenges of the future and better contribute to the agencies’ major efforts 

to meet their missions and goals. 

Agency Comments We provided a draft of this report to the Secretary of Labor, the Executive 

Director of PBGC, the Director of NIH, the Administrator of GSA, and the 

Commissioner of SSA. Each of these organizations provided comments on 

the draft report and agreed with the information presented. DOL’s Director 

of Workforce Planning and Diversity; PBGC’s Chief Human Capital Officer; 

and GSA’s Program Management Officer, Office of the Chief People Officer, 

also provided written technical comments to clarify specific points 

regarding the information presented. Where appropriate, we have made 

changes to reflect those technical comments. NIH and SSA officials did not 

provide technical comments.

In addition to technical comments, GSA noted that while the report 

presents a case study on workforce planning efforts of one region, GSA has 

used and continues to use a robust agencywide workforce planning 

process. We have clarified the report to recognize that our example is 

limited to the activities of one GSA region and does not address the 

agency’s overall workforce planning efforts. 
Page 25 GAO-04-39 Effective Strategic Workforce Planning

We are sending copies of this report to other interested congressional 

parties, the Director of OPM, the Secretary of Labor, the Secretary of 

Health and Human Services, the Commissioner of the Social Security 

Administration, the Director of the National Institutes of Health, and the 

Executive Director of the Pension Benefit Guaranty Corporation. In 

addition, we will make copies available to others upon request. The report 

will also be available at no charge on the GAO Web site at 

http://www.gao.gov.

If you have any questions about this report, please contact me or William 

Doherty on (202) 512-6806. Others who contributed to this report were 

Bob Lilly, Adam Hoffman, Andrew Edelson, and Candyce Mitchell.

J. Christopher Mihm

Director, Strategic Issues
Page 26 GAO-04-39 Effective Strategic Workforce Planning

List of Requesters

The Honorable Susan M. Collins

Chairman

The Honorable Joseph I. Lieberman

Ranking Minority Member

Committee on Governmental Affairs

United States Senate

The Honorable Daniel K. Akaka

Ranking Minority Member

Subcommittee on Financial Management, the 

Budget, and International Security

Committee on Governmental Affairs

United States Senate

The Honorable George Voinovich

Chairman

The Honorable Richard J. Durbin

Ranking Minority Member

Subcommittee on Oversight of Government Management, 

the Federal Workforce, and the District of Columbia

Committee on Governmental Affairs

United States Senate

The Honorable Thad Cochran 

United States Senate
Page 27 GAO-04-39 Effective Strategic Workforce Planning

Appendix I

Scope and Methodology ApApenednxidexiIs

To identify strategic workforce planning principles and illustrative agency 

examples, we gathered and analyzed information from a variety of sources. 

We reviewed our own guidance, reports, and testimonies on federal 

agencies’ workforce planning and human capital management efforts, and 

guidance available through the Internet and leading human capital 

periodicals, such as the Workforce Planning Resource Guide for Public 

Sector Human Resource Professionals issued by the International 

Personnel Management Association. We also met with officials from 

organizations with governmentwide responsibilities for or expertise in 

workforce planning, such as the Office of Personnel Management and the 

National Academy of Public Administration, to identify additional guidance 

available and to obtain their recommendations of federal agencies engaged 

in effective workforce planning. We synthesized information from these 

meetings, reports, and guidance documents and our own experiences in 

human capital management to (1) derive five principles that appeared most 

important to effective strategic workforce planning and (2) identify 

agencies we would contact for examples of workforce planning that 

illustrated these principles. 

We then selected five examples of agencies’ workforce planning activities 

(one example corresponding to each of the five workforce planning 

principles) to present in the report. We met with human capital and 

program officials and analyzed documents related to these examples to 

more fully understand the specific workforce planning issues associated 

with the examples and how the agencies addressed these issues. 

We selected the examples that in our judgment collectively illustrated these 

principles across a diverse set of federal programs. Because our review 

objectives did not include evaluating the effectiveness of agencies' 

workforce planning processes, we did not evaluate these processes nor did 

we require the presence of evaluations or other evidence demonstrating 

planning effectiveness as a criterion for selecting examples. We did 

exclude from consideration, however, processes that agencies were just 

beginning or that were not complete enough for agencies to be willing to 

present them as successful planning efforts.

The fact that an agency is profiled to illustrate the principles of a particular 

planning step is not meant to imply complete success for addressing the 

matter or lack of success for addressing other aspects of workforce 

planning. Furthermore, the efforts in the examples do not represent all the 

potential ways that an agency can implement workforce planning or 

address the specific human capital issue being discussed. 
Appendix I

Scope and Methodology

Page 28 GAO-04-39 Effective Strategic Workforce Planning

We conducted our work in Washington, D.C., from March 2002 through 

October 2003, in accordance with generally accepted government auditing 

standards.
Page 29 GAO-04-39 Effective Strategic Workforce Planning

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DOD Personnel: Documentation of the Army's Civilian WorkforcePlanning Model Needed to Enhance Credibility. GAO-03-1046. 

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August 2, 2002.
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(450100)
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