United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Regulations, 

Health Care, and Trade, Committee on 

Small Business, House of Representatives

HUMAN CAPITAL 

Workforce Diversity 

Governmentwide and at the 

Small Business 

Administration 

Statement of George H. Stalcup 

Director 

Strategic Issues 

For Release on Delivery

Expected at 12:00 noon EDT 

Wednesday, April 23, 2008

 

GAO-08-725T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 23, 2008

HUMAN CAPITAL

Workforce Diversity Governmentwide and at the 

Small Business Administration 

Highlights of GAO-08-725T, a testimony 

before the Subcommittee on Regulations, 

Health Care, and Trade, Committee on 

Small Business, House of Representatives

Data in OPM’s CPDF show that Hispanic representation governmentwide for 

permanent and nonpermanent employees increased from 6.6 percent in 2000

to 7.7 percent in 2007. At SBA, Hispanic representation for 2007 among 

permanent and nonpermanent employees was 8.6 percent, which exceeded 

Hispanic representation governmentwide, but represented a decline from 9.7 

percent in 2000. 

For the SES, the highest nonpolitically appointed leaders in the federal 

workforce, GAO recently looked more closely at the workforce diversity of 

those who were career, or permanent, appointments (GAO-08-609T). Data in 

OPM’s CPDF show that as of September 2007, the overall percentages of 

women and minorities, including Hispanics, have increased in the career SES 

governmentwide and the SES developmental pool for potential successors 

since October 2000. 

October 2000 September 2007

Percent Percent

Governmentwide

Number 

Women Minorities

Number 

Women Minorities

SES 6,110 23.6 13.8 6,555 29.1 15.8

SES potential 

developmental 

pool (GS-15s and 

GS-14s) 

135,012 28.2 17.0 149,149 34.3 22.5

Source: GAO analysis of OPM’s CPDF. 

As part of GAO’s recent analysis of the diversity of the SES and the SES 

developmental pool, GAO looked more closely at career, or permanent, SES 

appointments at federal agencies, including SBA. 

October 2000 September 2007

Percent Percent

SBA

Number 

Women Minorities

Number 

Women Minorities

SES 39 33.3 33.3 36 27.8 38.9

SES potential 

developmental 

pool (GS-15s and 

GS-14s) 

548 34.1 24.6 541 40.7 31.8

Source: GAO analysis of OPM’s CPDF. 

Unlike the increase in the number of career SES governmentwide and those in 

the SES developmental pool for potential successors for October 2000 through

September 2007, the number of career SES and those in the SES 

developmental pool at SBA declined. For this testimony, GAO did not analyze 

the factors that contributed to changes in SBA’s workforce from October 2000

through September 2007. However, OPM and EEOC in their oversight roles 

require federal agencies, including SBA, to analyze their workforces. As part 

of a strategic human capital planning approach, agencies need to develop 

long-term strategies for acquiring, developing, motivating, and retaining staff. 

An agency’s human capital planning should address the demographic trends 

that the agency faces with its workforce, especially retirements.

Hispanics are the fastest-growing

segment of the civilian labor force,

which is defined as those 16 and 

older (including federal workers)

who are employed or looking for

work and are not in the military or 

institutionalized. In August 2006, 

GAO reported on factors affecting 

Hispanic representation in the 

federal workforce and efforts being 

taken by the Equal Employment

Opportunity Commission (EEOC), 

the Office of Personnel 

Management (OPM), and other

agencies, including the Small

Business Administration (SBA)—

an independent agency that aids, 

counsels, assists, and protects the 

interests of small business 

concerns (GAO-06-832). In May 

2007, GAO issued a report that

contained data on Hispanic 

representation in the federal 

government through fiscal year

2006 (GAO-07-493R). In April 2008, 

GAO testified on diversity in the 

Senior Executive Service (SES) and 

the senior ranks of the U.S. Postal 

Service (GAO-08-609T). 

In response to a request to provide 

updated information on minorities

and Hispanics in the federal

workforce, GAO is providing 

demographic data—with an

emphasis on Hispanic

representation—related to the 

federal government as a whole and 

SBA’s workforce. GAO obtained 

these data from OPM’s Central 

Personnel Data File (CPDF). 

To view the full product, including the scope 

and methodology, click on GAO-08-725T. 

For more information, contact George Stalcup 

at (202) 512-6806 or stalcupg@gao.gov. 
Chairman Gonzalez, Ranking Member Westmoreland, and Members of the 

Subcommittee: 

I am pleased to be here today to provide the Subcommittee with 

information on diversity, including Hispanic representation, of the federal

workforce and at the Small Business Administration (SBA). Earlier this 

month, we reported on the diversity of the senior ranks of the federal 

government and the U.S. Postal Service.1

 In August 2006, we reported on 

factors affecting Hispanic representation in the federal workforce and 

efforts being taken by the Equal Employment Opportunity Commission 

(EEOC), the Office of Personnel Management (OPM), and other agencies, 

including SBA—an agency that aids, counsels, assists, and protects the 

interests of small business concerns.2

 In May 2007, we issued a report that 

contained data on Hispanic representation in the federal government 

through September 2006.

3

 While we have not done any additional analysis 

on Hispanic representation since our August 2006 report, for this 

testimony, we have added data on Hispanic representation for September 

2007. 

As we have previously reported, Hispanics are the fastest-growing segment 

of the civilian labor force (CLF),4

 with their representation increasing from

8.5 percent in 1990 to 13.3 percent in 2007.

5

 Our August 2006 report 

identified citizenship and education as the two measurable factors having 

the greatest impact on Hispanic representation in the federal workforce. 

 1

GAO, Human Capital: Diversity in the Federal SES and Senior Levels of the U.S. Postal 

Service and Processes for Selecting New Executives, GAO-08-609T (Washington, D.C.: 

Apr. 3, 2008). 

2

GAO,The Federal Workforce: Additional Insights Could Enhance Agency Efforts Related 

to Hispanic Representation, GAO-06-832 (Washington, D.C.: Aug. 17, 2006).

3

GAO,Data on Hispanic Representation in the Federal Workforce, GAO-07-493R 

(Washington, D.C.: May 18, 2007). 

4

The CLF is defined as those 16 and older (including federal workers), regardless of 

citizenship, who are employed or looking for work and are not in the military or 

institutionalized. A minimum age of 18 years is required for most federal employment. 

5

 In 2005, Hispanics who were United States citizens comprised 7.6 percent of the CLF. 

Page 2 GAO-08-725T 
OPM reported that Hispanic representation in the federal workforce 

increased from 5.3 percent in 1990 to 7.8 percent for 2007.

6

Driven by long-term fiscal constraints, changing demographics, evolving 

governance models, and other factors, the federal government is facing 

new and more complex challenges in the 21st century, and federal 

agencies must transform their organizations to meet these challenges. 

Strategic human capital management must be the centerpiece of any

serious change management strategy. We currently have work under way 

reviewing SBA’s organizational transformation efforts. Today, as 

requested, my remarks will focus on demographic data related to the 

federal government as a whole and SBA’s workforce, with an emphasis on 

Hispanic representation.

For our analyses of governmentwide and SBA demographic data, we 

extracted data from OPM’s Central Personnel Data File (CPDF). We 

believe the CPDF is sufficiently reliable for the informational purpose of 

this testimony.7

 We conducted this performance audit in April 2008 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

 6

OPM’s percentages are based on the permanent, or career, federal workforce. Including 

both career and noncareer employees results in governmentwide Hispanic representation 

of 7.7 percent for 2007. 

7

See GAO-08-609T for a fuller discussion of the reliability of CPDF data. 

Page 3 GAO-08-725T 
Hispanic representation in the governmentwide workforce increased from 

6.6 percent in September 2000 to 7.7 percent in September 2007.8

 Table 1 

shows a breakdown of the representation of Hispanics by Chief Financial 

Officers (CFO) Act agencies for those years.9

Table 1: Hispanic Representation by CFO Act Agency for 2000 and 2007 

CFO Act agency 

Percent in

September 2000 

Percent in

September 2007

Agriculture 5.8 6.7

AID 3.5 4.1

Commerce 4.0 3.9

Defense 6.0 6.3

Education 4.6 4.4

Energy 5.4 6.4

EPA 4.7 5.0

FEMA 10.5 a

GSA 4.9 5.4

HHS 3.1 3.5

DHS b18.3

HUD 7.0 7.2

Interior 4.7 5.1

Justice 12.9 9.0

Labor 6.9 6.8

NASA 5.0 5.6

NRC 2.5 5.0

NSF 2.7 2.5

OPM 3.9 3.9

SBA 9.7 8.6

SSA 10.1 13.1

State 4.1 4.7

Transportation 4.9 6.2

Representation of 

Hispanics Increased 

Governmentwide and 

at Most Agencies from 

2000 through 2007 

 8

Governmentwide data on Hispanic representation include permanent and nonpermanent

employees. 

9

The CFO Act agencies are 24 major executive agencies that are subject to the CFO Act. In

2006, the CFO Act agencies employed 98 percent of federal employees. Pub. L. No. 101-576, 

104 Stat. 2838 (Nov. 15, 1990), as amended. 

Page 4 GAO-08-725T 
CFO Act agency 

Percent in

September 2000 

Percent in

September 2007

Treasury 8.8 8.9

VA 6.3 6.9

Source: GAO analysis of OPM’s CPDF. 

Notes: Data on Hispanic representation by agency include permanent and nonpermanent employees. 

AID is the Agency for International Development; EPA is the Environmental Protection Agency; FEMA

is the Federal Emergency Management Agency; GSA is the General Services Administration; HHS is

the Department of Health and Human Services; DHS is the Department of Homeland Security; HUD 

is the Department of Housing and Urban Development; NASA is the National Aeronautics and Space 

Administration; NRC is the Nuclear Regulatory Commission; NSF is the National Science Foundation;

SSA is the Social Security Administration; and VA is the Department of Veterans Affairs.

a

FEMA was an independent agency and 1 of the 24 CFO Act agencies until the formation of DHS in 

2003. 

b

DHS did not exist before March 2003. It was created from 22 agencies or parts of agencies, including 

the U.S. Customs Service, which was formerly located in the Department of the Treasury; FEMA; the 

Coast Guard; and part of the Immigration and Naturalization Service, which was formerly located in 

the Department of Justice. 

Hispanic representation increased at 16 CFO Act agencies from September 

2000 through September 2007. As of September 2007, Hispanic

representation in 5 CFO Act agencies exceeded the 7.7 governmentwide 

percentage: the Department of Homeland Security, the Department of 

Justice, SBA, the Social Security Administration, and the Department of 

the Treasury. Of those 5, representation at 2—the Department of Justice 

and SBA—declined from 2000 through 2007.10

Table 2 shows the representation of Hispanics under another subset of the 

federal workforce, by pay plan/grade, for 2000 and 2007. 

 10It should be noted that the loss of Hispanic employees at the Department of Justice could

have been the result of staff reorganization because of the formation of the Department of 

Homeland Security, which was created in March 2003 and which exceeded the fiscal year 

7.7 governmentwide percentage of Hispanic representation. 

Page 5 GAO-08-725T 
Table 2: Hispanic Representation Governmentwide by Pay Plan/Grade for 2000 and

2007 

Pay plan/grade 

Percent in

September 2000 

Percent in

September 2007

Blue collar 7.6 7.8

Grades 1-4 8.7 9.2

Grades 5-8 8.0 9.5

Grades 9-12 6.6 8.4

Grade 13 4.3 5.5

Grade14 3.7 4.6

Grade 15 3.3 4.1

SESa 3.1 3.7

SL/STb1.9 2.3

ESc6.4 5.6

Otherd5.6 7.0

Source: GAO analysis of OPM’s CPDF. 

Note: These data include permanent and nonpermanent employees.

a

The SES consists of both permanent and nonpermanent appointments, paid according to the SES 

pay schedule and those in the Federal Aviation Administration (FAA) who have equivalent positions. 

These are the highest nonpolitically appointed leaders in the federal workforce. 

b

SL/ST includes those in the Senior Level and Senior Technical pay plans and those in FAA who 

have equivalent positions. These are primarily engineers, scientists, and other top-level professionals. 

They do not have the leadership role of the SES. 

c

ES consists of Executives, who are politically appointed agency leaders paid according to the 

Executive Schedule. 

d

Other includes those who could not be placed in one of the above pay plans or grades. 

Hispanic representation increased in all plans/grades governmentwide but 

one, ES, which consists of Executives, who are politically appointed 

agency leaders paid according to the Executive Schedule. For this 

testimony, we did not analyze factors that contributed to the changes in 

Hispanic representation from 2000 to 2007 or changes by pay plans or 

grade levels.

Data presented up to this point have been for both permanent and 

nonpermanent employees. For the Senior Executive Service (SES), the 

highest nonpolitically appointed leaders in the federal workforce, we 

recently looked more closely at those who were career, or permanent, 

Page 6 GAO-08-725T 
appointments.11 As we have reported, leadership in agencies across the 

federal government, especially at senior executive levels, is essential to 

providing accountable, committed, consistent, and sustained attention to 

human capital and related organizational transformation issues. Having a 

diverse SES corps, which generally represents the most experienced 

segment of the federal workforce, can be an organizational strength that 

can bring a wider variety of perspectives and approaches to bear on policy 

development and implementation, strategic planning, problem solving, and 

decision making. Table 3 shows the changes in the representation of 

career SES governmentwide from October 2000 through September 2007. 

Table 3: Changes in the Career SES Governmentwide 

Career SES governmentwide 

October 2000 September 2007 

Changes in career 

SES governmentwide Equal employment 

opportunity group Number Percent Number Percent Number Percent

African American 512 8.4 560 8.5 +48 +0.1

American Indian/Alaska Native 75 1.2 88 1.3 +13 +0.1

Asian/Pacific Islander 103 1.7 153 2.3 +50 +0.8

Hispanic 155 2.5 236 3.6 +81 +1.1

White 5,261 86.1 5,502 83.9 +241 -2.2

Unspecified/other 4 0.1 16 0.2 +12 +0.1

Total

a 6,110 100.0 6,555 100.0 +445 +0.0

Source: GAO analysis of OPM’s CPDF. 

Notes: Governmentwide includes civilian employees of all cabinet-level departments, independent 

agencies, commissions, councils, and boards in the executive branch except the intelligence

agencies, the U.S. Postal Service, and the Foreign Service (as of 2007). 

a

Percentages may not add to 100 because of rounding. 

As shown in table 3, the two greatest percentage changes among equal 

employment opportunity (EEO) groups within the career SES 

governmentwide from October 2000 to September 2007 were a decrease 

among Whites and an increase among Hispanics. 

The vast majority of potential successors for career SES positions will 

come from the general schedule (GS) pay plan for grades GS-15 and GS-14, 

 11Career SES members are individuals with civil service status (permanent) who are 

appointed competitively to SES positions and serve in positions below the top political 

appointees in the executive branch of government. See GAO-08-609T. 

Page 7 GAO-08-725T 
the levels that serve as the SES developmental pool.12 Table 4 shows the 

changes in the representation of the SES developmental pool 

governmentwide from October 2000 to September 2007. 

Table 4: Changes in the SES Developmental Pool Governmentwide

SES governmentwide 

developmental pool

(GS-15s and GS-14s) 

October 2000 September 2007 

Changes in SES 

governmentwide

developmental pool Equal employment 

opportunity group Number Percent Number Percent Number Percent

African American 10,679 7.9 15,547 10.4 +4,868 +2.5

American Indian/ Alaska Native 1,254 0.9 1,528 1.0 +274 +0.1

Asian/Pacific Islander 6,361 4.7 9,808 6.6 +3,447 +1.9

Hispanic 4,668 3.5 6,611 4.4 +1,943 +0.9

White 111,936 82.9 115,368 77.4 +3,432 -5.5

Unspecified/other 114 0.1 287 0.2 +173 +0.1

Total

a

135,012 100.0 149,149 100.0 14,137 +0.0

Source: GAO analysis of OPM’s CPDF. 

Notes: Governmentwide includes civilian employees of all cabinet-level departments, independent 

agencies, commissions, councils, and boards in the executive branch except the intelligence

agencies, the U.S. Postal Service, and the Foreign Service (as of 2007). We included GS-15, GS-14,

and equivalent employees. GS-equivalent employees are those in equivalent grades under other pay 

plans that follow the GS grade structure and job evaluation methodology or are equivalent by statute. 

a

Percentages may not add to 100 because of rounding. 

As shown in table 4, the two greatest percentage changes among EEO 

groups within the SES governmentwide developmental pool from October 

2000 to September 2007 were a decrease among Whites and an increase 

among African Americans. 

 12We included GS-15, GS-14, and equivalent employees. GS-equivalent employees are those

in equivalent grades under other pay plans that follow the GS grade structure and job 

evaluation methodology or are equivalent by statute. 

Page 8 GAO-08-725T 
SBA was established as an independent agency of the federal government 

by the Small Business Act of 1953, among other things, to assist small 

business concerns.13 In pursuing its mission of aiding small businesses, 

SBA provides small businesses with access to credit, primarily by 

guaranteeing loans through its 7(a) and other loan programs, and provides 

entrepreneurial assistance through partnerships with private entities that 

offer small business counseling and technical assistance. SBA also 

administers small business development and procurement programs, 

which are designed to assist small businesses and small disadvantaged 

businesses in their development and in obtaining federal contracts and 

subcontracts. In addition, SBA makes loans to businesses and individuals

trying to recover from disasters. In fiscal year 2007, SBA carried out its 

programs with about 5,000 employees in headquarters and field offices.14

Based on your request, for this testimony as shown in table 5, we are 

providing data on Hispanic representation at SBA by pay plan/grade for 

2000 and 2007. 

Hispanic 

Representation 

Increased at SBA 

from 2000 through 

2007, and Retirement 

Eligibility Presents 

Opportunities for 

Affecting Workforce 

Diversity 

 13See Title II of Public Law 163, 67 Stat. 232 (July 30, 1953) (codified as amended at 15 

U.S.C. §§ 631 et seq.). 

14According to SBA, its permanent staff in fiscal year 2007 equaled 2,531, and temporary

staff equaled 2,525. 

Page 9 GAO-08-725T 
Table 5: Hispanic Representation at SBA by Pay Plan/Grade for Fiscal Years 2000 

and 2007 

Pay plan/grade 

Percent in

September 2000 

Percent in

September 2007

Blue collar a a

Grades 1-4 10.5 b

Grades 5-8 12.6 10.7

Grades 9-12 10.3 8.1

Grade 13 6.6 9.1

Grade14 6.2 5.6

Grade 15 9.4 8.8

SES 8.0 12.2

SL/ST c c

ESd a a

Othere6.1 2.3

Source: GAO analysis of OPM’s CPDF. 

Notes: These data include permanent and nonpermanent employees. The SES consists of four

categories of appointments: career, which is a permanent appointment, and noncareer, limited term, 

and limited emergency, which are nonpermanent. SL/ST includes those in the Senior Level and 

Senior Technical pay plans and those in FAA who have equivalent positions. These are primarily 

engineers, scientists, and other top-level professionals. They do not have the leadership role of the 

SES. 

a

Because the total number of individuals employed in this category was less than 20 (i.e., 1 to 19), we 

are not reporting Hispanic representation at this grade level or in this pay plan, as there is an issue of 

sensitivity of percentages related to small numbers.

b

The total number of individuals employed in this category or in this pay plan ranged from 20 to 50. 

c

SBA did not employ individuals at this grade level or pay plan during the indicated year. 

d

ES consists of Executives, who are politically appointed agency leaders paid according to the 

Executive Schedule. 

e

Other includes those who could not be placed in one of the above pay plans or grades. 

In both 2000 and 2007, Hispanic representation in pay plans/grades 5 

through 8, 13, 14, 15, and the SES at SBA exceeded Hispanic 

representation governmentwide for these pay plans/grades (see table 2 for 

Hispanic representation governmentwide by pay plan/grade). From 

September 2000 through September 2007, Hispanic representation at SBA 

increased in pay plans/grades 13 and SES. 

As part of our governmentwide analysis of the diversity of the SES and the 

SES developmental pool, we looked more closely at career, or permanent, 

SES appointments at federal agencies, including SBA. Table 6 shows the 

Page 10 GAO-08-725T 
changes in the representation of the career SES at SBA from October 2000 

to September 2007. See appendix I for more information on career SES 

diversity at SBA. 

Table 6: Changes in the Career SES at SBA 

Career SES at SBA 

October 2000 September 2007 

Changes in

career SES at SBA Equal employment 

opportunity (EEO) group Number Percent Number Percent Number Percent

African American 10 25.7 8 22.3 -2 -3.4

American Indian/ Alaska Native 0 0.0 0 0.0 0 0.0

Asian/Pacific Islander 0 0.0 1 2.8 +1 +2.8

Hispanic 3 7.7 5 13.9 +2 +6.2

White 26 66.7 22 61.1 -4 -5.6

Unspecified/other 0 0.0 0 0.0 0 0.0

Total

a

39 100.0 36 100.0 -3 0.0

Source: GAO analysis of OPM’s CPDF. 

Notes: Governmentwide includes civilian employees of all cabinet-level departments, independent 

agencies, commissions, councils, and boards in the executive branch except the intelligence

agencies, the U.S. Postal Service, and the Foreign Service (as of 2007). 

a

Percentages may not add to 100 because of rounding. 

Similar to governmentwide career SES, the two greatest percentage 

changes among EEO groups within the career SES at SBA from October 

2000 to September 2007 were a decrease among Whites and an increase 

among Hispanics. However, with fewer than 40 total SES members, it 

should be noted that even small changes will have a notable impact on 

representation—for example, as seen in the September 2007 data, an

increase of two Hispanics in the SES from October 2000 to September 

2007 resulted in an increase in SES Hispanic representation at SBA from 

7.7 percent to 13.9 percent. In addition, unlike the increase in the number 

of career SES governmentwide from October 2000 to September 2007, the 

number of career SES at SBA declined. 

We did not analyze the factors that contributed to changes in SBA’s 

workforce from October 2000 through September 2007. However, OPM 

and EEOC in their oversight roles require federal agencies, including SBA,

to analyze their workforces, and both agencies also report on 

governmentwide representation levels. Under OPM’s regulations 

Page 11 GAO-08-725T 
implementing the Federal Equal Opportunity Recruitment Program 

(FEORP),15 agencies are required to determine where representation levels 

for covered groups are lower than the CLF and take steps to address those 

differences. EEOC’s Management Directive 715 (MD-715) provides 

guidance and standards to federal agencies for establishing and 

maintaining effective EEO programs, including a framework for executive

branch agencies to help ensure effective management, accountability, and 

self-analysis to determine whether barriers to EEO exist and to identify 

and develop strategies to mitigate or eliminate the barriers to 

participation.16 Specifically EEOC’s MD-715 states that agency personnel 

programs and policies should be evaluated regularly to ascertain whether 

such programs have any barriers that tend to limit or restrict equitable

opportunities for open competition in the workplace. The initial step is for 

agencies to analyze their workforce data with designated benchmarks, 

including the CLF. If analysis of their workforce profiles identifies 

potential barriers, agencies are to examine all related policies, procedures, 

and practices to determine whether an actual barrier exists. EEOC 

requires agencies to report the results of their analyses annually. 

Table 7 presents changes in SBA’s SES developmental pool of GS-15s and 

GS-14s. 

 155 U.S.C. § 7201 and 5 C.F.R. Part 720, Subpart B. 

16EEOC defines barriers as agency policies, principles, or practices that limit or tend to 

limit employment opportunities for those of a particular gender, race, or ethnic background

or based on an individual’s disability status. 

Page 12 GAO-08-725T 
Table 7: Changes in the SES Developmental Pool at SBA 

SBA’s SES developmental pool (GS-15s and GS-14s) 

October 2000 September 2007 

Changes in SBA’s SES 

developmental pool Equal employment 

opportunity (EEO) group Number Percent Number Percent Number Percent

African American 77 14.1 104 19.2 +27 +5.1

American Indian/ Alaska Native 3 0.5 3 0.5 0 0.0

Asian/Pacific Islander 17 3.1 29 5.4 +12 +2.3

Hispanic 38 6.9 36 6.7 -2 -0.2

White 413 75.4 369 68.2 -44 -7.2

Unspecified/other 0 0.0 0 0.0 0 0.0

Total

a

548 100.0 541 100.0 -7 0.0

Source: GAO analysis of OPM’s CPDF. 

Notes: We included GS-15, GS-14, and equivalent employees. GS-equivalent employees are those in 

equivalent grades under other pay plans that follow the GS grade structure and job evaluation 

methodology or are equivalent by statute. 

a

Percentages may not add to 100 because of rounding. 

Similar to the governmentwide SES developmental pool, the two greatest 

percentage changes among EEO groups within SBA’s developmental pool 

from October 2000 to September 2007 were a decrease among Whites and 

an increase among African Americans. Hispanic representation in the SES 

developmental pool declined at SBA from October 2000 through 

September 2007 but remained above Hispanic representation for the 

governmentwide SES developmental pool for the same period (see 

table 4). 

As we have previously reported,17 as part of a strategic human capital 

planning approach, agencies need to develop long-term strategies for 

acquiring, developing, motivating, and retaining staff. An agency’s human 

capital planning should address the demographic trends that the agency 

faces with its workforce, especially retirements. In 2006, OPM reported 

that approximately 60 percent of the executive branch’s 1.6 million whitecollar employees and 90 percent of about 6,000 federal executives will be 

 17GAO, Human Capital: Federal Workforce Challenges in the 21st Century, GAO-07-556T 

(Washington, D.C.: Mar. 6, 2007). 

Page 13 GAO-08-725T 
eligible for retirement over the next 10 years. SBA, like most federal 

agencies, will face these challenges. 

Rather than simply recreating the existing organization, as we have

previously reported, effective succession planning and management, 

linked to the strategic human capital plan, can help an organization 

become what it needs to be. Leading organizations go beyond a 

“replacement” approach that focuses on identifying particular individuals 

as possible successors for specific top-ranking positions. Rather, they 

typically engage in broad, integrated succession planning and management 

efforts that focus on strengthening both current and future capacity, 

anticipating the need for leaders and other key employees with the 

necessary competencies to successfully meet the complex challenges of 

the 21st century. 

In an October 2007 report,18 the SBA Inspector General identified effective

succession planning as a management challenge for SBA and found that 

the agency lacked effective human capital strategies needed to enable SBA 

to successfully carry out its mission and become a high performing 

organization. In its fiscal year 2007 annual performance report, SBA 

acknowledged that, among other actions, it needed to develop a more 

systematic workforce planning process and to better align its human 

capital plans, strategies, and systems to achieve organizational 

effectiveness and accomplish its mission. In fiscal year 2007, SBA reported 

achieving such outcomes as completing an occupational skills gap analysis 

and revising its SES Candidate Development Program.19 SBA also 

identified strategies for fiscal years 2008 and 2009 to further its progress in 

strategic human capital management. 

In addition, succession planning is tied to the federal government’s 

opportunity to affect the diversity of the executive corps through new 

appointments. In September 2003,20 we reported that agencies in other 

countries use succession planning and management to achieve a more 

diverse workforce, maintain their leadership capacity, and increase the 

 18U.S. Small Business Administration, Office of Inspector General, Fiscal Year 2008 Report

on the Most Serious Management and Performance Challenges Facing the Small 

Business Administration, Report No. 08-01 (Washington, D.C.: Oct. 16, 2007). 

19The last SBA SES Candidate Development Program was completed in fiscal year 2004. 

20GAO, 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 14 GAO-08-725T 
retention of high-potential staff. From 1991 through 2001 at SBA, a District 

Director Candidate Development Program recruited and developed a 

diverse group of highly qualified and trained managers at the GS-15, GS-14, 

and GS-13 levels to fill district director positions on a noncompetitive 

basis as they became vacant.21 An SBA official stated that over that time 

the program had over 25 graduates and that in 2007 SBA expanded the 

program into a Management Development Program to fill management and 

leadership positions. 

Chairman Gonzalez, Ranking Member Westmoreland, and Members of the 

Subcommittee, this concludes my prepared statement. I would be pleased

to respond to any questions that you may have. 

For further information regarding this statement, please contact George 

Stalcup, Director, Strategic Issues, on (202) 512-6806 or at 

stalcupg@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this 

statement. Individuals making key contributions to this statement included 

Belva Martin and Kiki Theodoropoulos, Assistant Directors; Nicholas C. 

Alexander, Karin Fangman, Jessica Thomsen, and Greg Wilmoth. 

Appendix I: Demographic Profiles of Career SES, GS-15, and GS-14 

Employees Governmentwide and at the Small Business Administration 

Contacts and 

Acknowledgments 

 21At SBA, district director positions are key managerial career positions responsible for 

providing agency services to the small business community.

Page 15 GAO-08-725T 
Appendix I 

Demographic Profiles of Career SES, GS-15, and GS-14 Employees 

Governmentwide and at the Small Business Administration 

Table 8: Demographic Profiles of Career SES, GS-15, and GS-14 Employees Governmentwide 

SES GS-15 

October 2000 September 2007 October 2000 September 2007 Octobe

Equal employment opportunity (EEO) group 

Number Percent Number Percent Number Percent Number Percent Number 

African American men 

333 5.5 328 5.0 1,711 3.3 2,123 3.6 3,401 

African American women 

179 2.9 232 3.5 1,500 2.9 2,374 4.1 4,067 

American Indian/Alaska Native men 

54 0.9 60 0.9 278 0.5 353 0.6 579 

American Indian/Alaska Native women 

21 0.3 28 0.4 103 0.2 193 0.3 294 

Asian/Pacific Islander men 

70 1.1 96 1.5 2,063 4.0 2,904 5.0 2,426 

Asian/Pacific Islander women 

33 0.5 57 0.9 836 1.6 1,604 2.8 1,036 

Hispanic men 112 1.8 176 2.7 1,197 2.3 1,660 2.8 2,117 Hispanic women 43 0.7 60 0.9 470 0.9 760 1.3 884 White men 4,097 67.1 3,976 60.7 33,567 64.8 32,931 56.5 49,548 White women 1,164 19.1 1,526 23.3 10,062 19.4 13,326 22.9 18,759 Unspecified/other 4 0.1 16 0.2 39 0.1 87 0.1 75 Totala 6,110 100.0 6,555 100.0 51,826 100.0 58,315 100.0 83,186 Minorities 845 13.8 1,037 15.8 8,158 15.7 11,971 20.5 14,804 Men 4,666 76.4 4,646 70.9 38,816 74.9 40,030 68.6 58,071 Minority men 569 9.3 660 10.1 5,249 10.0 7,040 12.1 8,523 Women 1,440 23.6 1,909 29.1 12,971 25.0 18,285 31.4 25,040 Minority women 276 4.5 377 5.8 2,909 5.6 4,931 8.5 6,281 Source: GAO analysis of the Office of Personnel Management’s Central Personnel Data File. Notes: Governmentwide includes civilian employees of all cabinet-level departments, independent agencies, commissions, councils, and branch except the intelligence agencies, the U.S. Postal Service, and the Foreign Service (as of 2007). We included GS-15, GS-14, and GS-equivalent employees are those in equivalent grades under other pay plans that follow the GS grade structure and job evaluation meequivalent by statute.aPercentages may not add to 100 because of rounding.Page 16 
Appendix I 

Table 9: Demographic Profiles of Career SES, GS-15, and GS-14 Employees at the Small BusinAdministration

SES GS-15 

October 2000 September 2007 October 2000 September 2007 Octobe

EEO group 

Number Percent Number Percent Number Percent Number Percent Number 

African American men 

6 15.4 6 16.7 13 7.3 14 7.3 26 

African American women 

4 10.3 2 5.6 11 6.1 21 10.9 27 

American Indian/Alaska Native men

0 0.0 0 0.0 3 1.7 2 1.0 0 

American Indian/Alaska Native women

0 0.0 0 0.0 0 0.0 0 0.0 0 

Asian/Pacific Islander men 

0 0.0 0 0.0 2 1.1 5 2.6 8 

Asian/Pacific Islander women 

0 0.0 1 2.8 0 0.0 3 1.6 7 

Hispanic men 2 5.1 4 11.1 11 6.1 11 5.7 13 Hispanic women 1 2.6 1 2.8 4 2.2 6 3.1 10 White men 18 46.2 16 44.4 99 55.3 96 49.7 186 White women 8 20.5 6 16.7 36 20.1 35 18.1 92 Unspecified/other 0 0.0 0 0.0 0 0.0 0 0.0 0 Totala 39 100.0 36 100.0 179 100.0 193 100.0 369 Minorities 13 33.3 14 38.9 44 24.6 62 32.1 91 Men 26 66.7 26 72.2 128 71.5 128 66.3 233 Minority men 8 20.5 10 27.8 29 16.2 32 16.6 47 Women 13 33.3 10 27.8 51 28.5 65 33.7 136 Minority women 5 12.8 4 11.1 15 8.4 30 15.5 44 Source: GAO analysis of the Office of Personnel Management’s Central Personnel Data File. Note: We included GS-15, GS-14, and equivalent employees. GS-equivalent employees are those in equivalent grades under other pay grade structure and job evaluation methodology or are equivalent by statute.aPercentages may not add to 100 because of rounding.(450674)Page 17 
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