Foreign Assistance: Strategic Workforce Planning Can Help USAID Address Current and Future Challenges
Published: 2003-08-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The U.S. Agency for International Development (USAID) oversees humanitarian and economic assistance--an integral part of the U.S. global security strategy--to more than 160 countries. GAO recommended in 1993 that USAID develop a comprehensive workforce plan; however, human capital management continues to be a high-risk area for the agency. GAO was asked to examine how changes in USAID's workforce over the past 10 years have affected the agency's ability to deliver foreign aid and to assess its progress in implementing a strategic workforce planning system.
section_title: What GAO Found
paragraphs: USAID has evolved from an agency in which U.S. direct-hire staff directly implemented development projects to one in which U.S. direct-hire staff oversee the activities of contractors and grantees. Since 1992, the number of USAID U.S. direct-hire staff declined by 37 percent, but the number of countries with USAID programs almost doubled and, over the last 2 years, program funding increased more than 50 percent. As a result of these and other changes in its workforce and its mostly ad-hoc approach to workforce planning, USAID faces several human capital vulnerabilities. For example, attrition of experienced foreign service officers and inadequate training and mentoring have sometimes led to the deployment of staff who lack essential skills and experience. The agency also lacks a "surge capacity" to respond to evolving foreign policy priorities and emerging crises. With fewer and less experienced staff managing more programs in more countries, USAID's ability to oversee the delivery of foreign assistance is becoming increasingly difficult. USAID has taken steps toward developing a workforce planning and human capital management system that should enable the agency to meet its challenges and achieve its mission in response to the President's Management Agenda, but it needs to do more. For example, USAID has begun its workforce analysis but it has not yet conducted a comprehensive assessment of the skills and competencies of its current workforce and has not yet included its civil service and contracted employees in its workforce planning efforts. Because USAID has not adopted a strategic approach to workforce planning, it cannot ensure that it has addressed its workforce challenges appropriately and identified the right skill mix to carry out its assistance programs.

section_title: Letter
paragraphs: Humanitarian and economic development assistance is an integral part of  U.S. global security strategy, particularly as the United States seeks to  diminish the underlying conditions of poverty and corruption that may be  linked to instability and terrorism. Since 1962, the U.S. Agency for  International Development (USAID) has managed more than $273 billion  in such assistance. In fiscal year 2003, Congress appropriated almost   $11.5 billion to USAID, and the agency managed programs in almost 160  countries. Agency staff often work in difficult environments and under  evolving program demands. More will be demanded of USAID’s staff as  they implement large-scale relief and reconstruction programs in  Afghanistan and Iraq while continuing traditional long-term development  assistance programs.
USAID administers foreign aid through a decentralized staffing structure,  with its headquarters in Washington, D.C., and missions located  throughout the world. In 1993, we recommended that USAID develop a  comprehensive workforce planning and management system to better  identify staffing needs and requirements. However, human capital  management continues to be a high-risk area at USAID and throughout  much of the federal government. According to the Office of Management  Budget (OMB), the federal government—including USAID—significantly  downsized its workforce during the 1990s through across-the-board cuts  rather than targeted reductions aligned with agency missions, and human  resources planning remains weak in most agencies. The President’s  Management Agenda, issued in fiscal year 2002, represents the  administration’s effort to improve the performance of federal departments  and agencies through 14 initiatives, including human capital management.  OMB concluded that without proper planning, the skill mix of the federal  workforce will not reflect tomorrow’s missions.
In light of USAID’s long-standing workforce planning and management  problems, you expressed concern about its ability to manage and oversee  its foreign assistance programs. In particular, you expressed concern  about USAID’s apparent inability to identify and readily address staffing  requirements. At your request, we examined (1) the changes in USAID’s  workforce since fiscal year 1990 and their effect on the agency’s ability to  deliver foreign assistance and (2) USAID’s progress in developing and  implementing a strategic workforce planning system.
To accomplish our objectives, we analyzed personnel data and workforce  planning documents and interviewed knowledgeable USAID officials  representing the agency’s regional, technical, and management bureaus in  Washington, D.C. We conducted fieldwork at seven overseas missions— the Dominican Republic, Ecuador, Egypt, Mali, Peru, Senegal, and the  West Africa Regional Program in Mali. We also evaluated USAID’s  strategic workforce planning efforts in terms of workforce planning  principles used by leading organizations: ensuring the involvement of  agency leadership, employees, and stakeholders; determining current  skills and competencies and those needed; implementing strategies to  address critical staffing needs; and evaluating progress in achieving human  capital goals.
subsections: section_title: Background
paragraphs: USAID is the lead U.S. agency for administering humanitarian and  economic assistance to about 160 countries. The USAID Administrator  reports to the Secretary of State and receives overall foreign policy  guidance from the Department of State. USAID operates its foreign  assistance programs from its offices in Washington, D.C., and from  missions and offices around the world.
In 1993, we reported that USAID had not adequately managed changes in  its overseas workforce and recommended that USAID develop a  comprehensive workforce planning and management system to better  identify staffing needs and requirements.
In the mid-1990s, USAID reorganized its activities around strategic  objectives and began reporting in a results-oriented format but had made  little progress in personnel reforms. In July 2002, we reported that USAID  could not quickly relocate or hire the staff needed to implement a large- scale reconstruction and recovery program in Latin America, and we  recommended actions to help improve USAID’s staffing flexibility for  future disaster recovery requirements. Appendix I summarizes several  reports and studies prepared by GAO and others since 1989 that address  USAID workforce planning and human capital management issues.
Studies by several organizations, including GAO, have shown that highly  successful service organizations in both the public and private sectors use  effective strategic management approaches to prepare their workforces to  meet present and future mission requirements. We define strategic  workforce planning as focusing on long-term strategies for acquiring,  developing, and retaining an organization’s workforce and aligning human  capital approaches that are clearly linked to achieving programmatic  goals. Based on work with the Office of Personnel Management, other U.S.  government agencies, the National Academy for Public Administration,  and the International Personnel Management Association, we identified  strategic workforce planning principles used by leading organizations.  According to these principles, an organization’s strategic workforce  planning and management system should (1) involve senior management,  employees, and stakeholders in developing, communicating, and  implementing the workforce plan; (2) determine the agency’s current  critical skills and competencies and those needed to achieve program  results; (3) develop strategies to address gaps in critical skills and  competencies; and (4) monitor and evaluate progress and the contribution  of strategic workforce planning efforts in achieving program goals.
section_title: USAID’s Changing Workforce Affects Ability to Deliver Foreign Assistance
paragraphs: USAID has changed from an agency of U.S. direct-hires that largely  provided direct, hands-on implementation of development projects to one  that manages and oversees the activities of contractors and grantees.  During the past decade, this trend has affected USAID’s ability to  implement its foreign assistance program as the number of U.S. direct-hire  foreign service officers declined and much of USAID’s direct-hire  workforce was replaced by foreign national personal services contractors.  In addition, while program funding remained relatively stable from fiscal  year 1990 through fiscal year 2000, it increased from $7.3 billion in fiscal  year 2001 to $11.5 billion in fiscal year 2003, and USAID’s fewer direct  hires are now responsible for programs in more countries with little or no  resident U.S. direct-hire presence. Moreover, USAID operates in a difficult  and uncertain environment that presents unique challenges to its ability to  plan and manage its overseas workforce. Because USAID did not have a  strategic workforce planning system while these changes were underway,  several human capital vulnerabilities have surfaced. For example, an  across-the-board reduction in force for both the foreign service and the  civil service, followed by a 5-year decline in the number of U.S. direct- hires, has left the agency with critical shortages of experienced mid-level  staff and in the pipeline of junior staff. In addition, 37 positions remain  vacant, and opportunities for training and mentoring staff are limited,  sometimes forcing the placement of staff who may lack essential skills and  experience. USAID also lacks a “surge” capacity to help it deal with  emerging crises and changing strategic priorities. According to USAID  documents and our discussions with agency officials, these vulnerabilities  are making it increasingly difficult for the agency to adequately manage  and oversee its foreign assistance activities.
subsections: section_title: USAID Staff Functions Have Evolved from Implementation to Management
paragraphs: USAID’s U.S. direct-hire workforce decreased from about 8,600 in 1962 to  about 3,162 in 1990. USAID could not continue its hands-on project  approach as the number of U.S. direct hires, including foreign service staff,  declined and responsibilities for planning, financing, and monitoring  projects shifted to contractors, grantees, and host country governments.  As figure 1 shows, this trend has continued as the number of U.S. direct- hire staff further decreased to 1,985 by December 2002. The number of  foreign national employees—both direct-hires and personal services  contractors—also decreased from 5,211 in fiscal year 1995 to 4,725 in  fiscal year 2002. Furthermore, while program funding levels remained  relatively stable for most of this period, program funding increased   57 percent from $7.3 billion in fiscal year 2001 to $11.5 billion in fiscal year  2003.
As numbers of U.S. direct-hire staff declined, mission directors began  relying on other types of employees, primarily foreign national personal  services contractors, to manage mission operations and oversee  development activities implemented by third parties. In December 2002,  according to USAID’s staffing report, the agency’s workforce totaled 7,741,  including 1,985 U.S. direct hires. Personal services contractors made up  more than two-thirds of USAID’s total workforce, including 4,653 foreign  national contractors (see fig. 2). Of the 1,985 U.S. direct hires, 974 were  foreign service officers, about 65 percent of whom were posted overseas.
For our analysis, we used the workforce definition developed by USAID’s  1990 Workforce Planning Working Group. This group defined the agency’s  workforce as those who have a direct employer-employee relationship  with USAID. This includes the following staff categories:    U.S. citizen direct-hire civil service in Washington, D.C.;    U.S. citizen direct-hire foreign service, most of whom serve at overseas  missions; foreign national (non-U.S. citizen) direct hires, whom USAID can employ  overseas for any foreign service-related mission, program, or activity; and   personal services contractors, both U.S. and foreign nationals, who are  individuals on contract with USAID for the specific services of that  individual only.
In addition, USAID includes in its monthly staffing report other types of  nondirect-hire staff with an employer-employee relationship, such as staff  detailed from a number of organizations and other U.S. government  agencies and centrally contracted technical advisors.
Other individuals not directly employed by USAID also perform a wide  range of services in support of the agency’s programs. These individuals  include employees of institutional or services contractors, private  voluntary organizations, and grantees. Last year, we reported that USAID  relies heavily on nongovernmental organizations to deliver foreign  assistance. In fiscal year 2000, USAID directed about $4 billion of its   $7.2 billion assistance funding to nongovernmental organizations,  including at least $1 billion to private voluntary organizations (charities)  working overseas. We further noted that, although USAID generally  chooses funding mechanisms that delegate a large amount of program  control to implementing organizations, it has not compiled data on its use  of specific types of funding or evaluated their effectiveness. In addition to  hiring third parties to implement its programs, USAID also contracts with  outside organizations to provide contract management and oversight of  large programs. As we reported in July 2002, the agency hired several  firms to manage and oversee some of the contractors and grantees  conducting USAID hurricane reconstruction activities in Latin America. At  present, USAID is also planning to hire outside parties to oversee the  large-scale contracts recently awarded for reconstruction activities in Iraq.
Despite the reliance on personal services and institutional contractors,  USAID officials maintain that the direct-hire foreign service officer is still  the core of mission staffing. He or she works toward achieving U.S. foreign  policy goals, gives direction to the country program, brings corporate  knowledge and a better understanding of agency guidance to the mission,  and provides the authority needed to work effectively with host country  counterparts and other U.S. government agencies. The quality and  deployment of foreign national contractors can vary among missions and  regions. U.S. personal services contractors are an important means for  filling mission positions when U.S. direct hires are not available.  According to USAID regulations, the terms of their contracts essentially  allow personal services contractors to perform almost the same duties as  U.S. government employees. About two-thirds work in technical positions,  but many serve as program and project development officers, controllers,  executive officers, and, occasionally, temporary mission directors— positions that USAID considers inherently governmental. According to  USAID officials, as a matter of policy, the agency rarely delegates  inherently governmental functions.
According to mission officials, U.S. and foreign national contractors are an  integral part of the mission workforce, but they cannot replace the agency  commitment and experience that U.S. direct-hire foreign service officers  bring to the mission. In addition to filling in for U.S. direct-hire staff,  contractors, particularly foreign nationals, typically make a career at  USAID and provide needed continuity and corporate knowledge of the  country programs. However, officials noted that, compared to direct-hire  staff, personal services contractors generally do not have the same level of  agency commitment; do not fully understand how the agency works and  the political pressures that it faces in Washington, D.C.; are not subject to  the same degree of accountability; and have limited administrative and  decisional authorities. Furthermore, contractors cannot supervise U.S.  direct-hire staff, even if the contractor is very experienced and the direct- hire is new to USAID. This further limits the training and mentoring  opportunities for new staff.
In addition to having reduced the number of U.S. direct hires, USAID now  manages programs in more countries with no U.S. direct-hire presence,  and its overseas structure has become more regional. Table 1 illustrates  the changes in USAID’s U.S. direct-hire overseas presence between fiscal  years 1992 and 2002. In fiscal year 1992, USAID managed activities in 88  countries with no U.S. direct-hire presence. According to USAID, in some  cases, activities in these countries are very small and require little  management by USAID staff. However, in 45 of these countries USAID  manages programs of $1 million or more, representing a more significant  management burden on the agency. USAID also increasingly provides  administrative and program support to countries from regional service  platforms, which have increased from 2 to 26 between fiscal years 1992  and 2002. Appendix II contains a complete list of the countries in which  USAID operates.
section_title: USAID’s Environment Affects Workforce Planning Capabilities
paragraphs: Our data collection efforts in the field and at headquarters revealed the  unique environment in which USAID missions operate and its effect on  workforce planning and management efforts. With the exception of Egypt,  the missions we visited did not prepare formal and separate workforce  plans. USAID missions tend to be relatively small—mission directors and  office heads have almost daily contact with the staff and are familiar with  their skills and capabilities. Missions conduct their workforce planning  and staffing projections in conjunction with their long-term—normally 5- year—country development strategies. Missions provide information on  resource needs in their annual reports and budget submissions to their  respective regional bureaus. USAID’s Bureau for Policy and Program  Coordination allots staff years and funding to the regional bureaus, which  then apportion these resources among their headquarters offices and  overseas missions. According to the bureau, the average mission has six  U.S. direct-hire staff.
Officials noted the difficulties in adhering to a formal workforce plan  linked to country strategies in an uncertain foreign policy environment.  For example, following the events of September 11, 2001, the Middle East  and sub-Saharan African missions we visited—Egypt, Mali, and Senegal— received additional work not anticipated when they developed their  country development strategies. Mali was seeking two additional personal  services contractors during the time of our visit, including one to manage a  new hunger initiative for Africa, and Egypt was in the process of  determining the staff needed to implement the Middle East Partnership  Initiative. In addition, the mission in Ecuador had been scheduled to close  in fiscal year 2003. However, this decision was reversed due to political  and economic events in Ecuador, including a coup in 2000, the collapse of  the financial system, and rampant inflation. Program funding for Ecuador  tripled from fiscal year 1999 to fiscal year 2000, while staffing was reduced  from 110 to 30 personnel and the budget for the mission’s operating  expenses was reduced from $2.7 million to $1.37 million.
Other factors unique to USAID’s overseas work environment can affect its  ability to conduct workforce planning and attract and retain top staff.  These factors vary from country to country and among regions. For  example:    USAID officials in Mali told us that hardship missions find it much more  difficult to attract U.S. staff. Foreign service staff in Mali receive a  hardship pay differential rate of 25 percent and an additional 15 percent  incentive pay. According to mission officials, these pay incentives are  essential for attracting high-quality staff to Mali, and many of the staff with  whom we met acknowledged that the extra pay was a factor when they  decided to bid on the Mali positions.
At several missions we visited—Egypt, Mali, and Peru—USAID officials  told us that the salaries set for foreign national employees by the  respective embassies make it difficult for missions to recruit and retain the  country’s top professional talent. This was particularly true in the poorest  countries with limited human resource capacities, such as Mali, where the  mission director stated that it is becoming increasingly difficult to  compete with international financial institutions and other donor  organizations for the country’s most highly qualified professionals.
Officials at all the missions we visited said that lengthy clearance  processes make it difficult to obtain staff in a timely manner and manage  their workforces. U.S. direct-hire staff and personal services contractors  must obtain both a security clearance and a medical clearance before they  report to work. As we reported in July 2002, in many cases it took 6  months to a year to hire personal services contractors for the emergency  hurricane reconstruction program in Latin America, and much of that time  was spent waiting for clearances.
USAID officials in several countries—particularly Ecuador, Mali, and  Senegal—also cited the agency’s separately appropriated operating  expense budget as a factor in their ability to support and train U.S. direct- hire staff. USAID missions are supposed to pay for all U.S. direct-hire  local expenses—such as housing, dependents’ education, travel, and  training—from its operating expense budgets and not from program funds.  According to mission officials, operating expense funds have not kept  pace with rising fixed costs, such as rent, facilities management, and  foreign national salaries and benefits. As a result, missions often opt for  contractor staff who can be paid from program funds. In addition, tight  operating expense funds and the limited number of U.S. direct-hire staff on  board have led some missions to restrict training opportunities for U.S.  direct-hire staff. Officials at the Mali and Senegal missions cited  availability of training for direct-hire staff as one of their major workforce  challenges.
section_title: Inadequate Attention to Workforce Planning Has Affected USAID’s Ability to Deliver Foreign Assistance
paragraphs: Because USAID has not responded to its changing workforce requirements  with a strategic workforce planning approach, its ability to carry out its  mission has been weakened. In response to a combination of poor  technology investments and other budgetary pressures in the mid-1990s,  USAID implemented a reduction in force and froze hiring. However, the  downsizing was conducted across the board and was not linked to a  strategic vision or skills analysis. The agency lost a cadre of experienced  foreign service officers and 5 years elapsed before new staff were hired to  replace them. USAID officials noted that the downsizings of the last  decade have resulted in an insufficient pipeline of junior and mid-level  staff with the experience to take on senior positions. As a result, several  human capital vulnerabilities have surfaced but have not been  systematically addressed. For example:  Increased attrition of U.S. direct hires since the reduction in force in the  mid-1990s led to the loss of the most experienced foreign service officers,  while the hiring freeze stopped the pipeline of new hires at the junior level.  The shortage of junior and mid-level officers to staff frontline jobs and a  number of unfilled positions have created difficulties at some overseas  missions.
Having fewer U.S. direct hires managing more programs in more countries  has resulted in a workforce that is overstretched, raising concerns about  USAID’s ability to provide effective accountability for program results and  financial management. As of December 31, 2002, USAID reported it had  631 U.S. direct-hire staff overseas compared to 1,082 at the end of fiscal  year 1992. However, USAID has not conducted a comprehensive workload  analysis to determine the extent to which staff may be overburdened or  unable to perform all required tasks.
USAID does not have a “surge capacity” to respond to emergencies; post- conflict situations, such as Afghanistan and Iraq; or new strategic  priorities, such as Pakistan and the Middle East.
USAID has generally recruited staff for their technical and development  expertise, but they spend a significant portion of their time managing  contracts and grants, a responsibility for which some staff have limited  skills or training.
Funding limitations and the shortage of U.S direct hires at USAID missions  have curtailed opportunities for on-the-job and formal training and  mentoring for both new staff and those taking on the most senior mission  positions. Those who have the knowledge and experience have little time  for training and mentoring, and the missions do not have enough staff who  can cover the tasks of those in training. This has forced USAID to assign  increasing numbers of less experienced staff overseas who may not have  the essential skills.
According to senior USAID officials, the reductions in direct-hire foreign  service staff have limited the agency’s ability to plan for emerging  development issues because staff must spend most of their time preparing  paperwork and monitoring activities. For example, USAID did not have  adequate staff with the knowledge, skills, and abilities to quickly deal with  such emerging issues as famine and human immunodeficiency  virus/acquired immune deficiency syndrome. Although the agency  eventually caught up with these issues, its ability to anticipate  development trends and demands has decreased.
section_title: USAID’s Progress in Implementing Strategic Workforce Planning Principles Is Limited
paragraphs: USAID does not have a systematic method for determining its workforce  needs and for implementing strategies that will enable its staff to meet the  agency’s numerous challenges and accomplish its strategic mission.  USAID is making limited progress in addressing the four principles for  effective strategic workforce planning that we identified as key practices  (see fig. 3).
subsections: section_title: Involvement of Agency Leaders, Employees, and Stakeholders in Strategic Workforce Planning Is Limited
paragraphs: USAID’s senior management is developing a human capital strategy to  respond to the President’s Management Agenda, but it has not identified  how it will significantly involve employees and other stakeholders in  developing and communicating the workforce strategies that result from  its efforts. We found that strategic workforce planning is most likely to  succeed if an agency’s leadership sets the overall direction and goals and  involves employees and stakeholders in developing, communicating, and  implementing workforce and human capital strategies. During the 1990s,  USAID’s downsizing efforts and budgetary constraints took precedence  over strategic workforce planning. Its human resource office was  understaffed and lacked experience in strategic workforce planning,  focusing mostly on collecting workforce data and hiring to replace staff  lost through attrition.
USAID’s leadership has attempted to reform its management systems. It  established the Business Transformation Executive Committee in  February 2002 to comply with the President’s Management Agenda’s  initiatives, and it appointed a Chief Human Capital Officer in May 2003 as  required by the Chief Human Capital Officers Act of 2002. In December  2002, the business transformation committee formed a human capital  subcommittee, consisting of senior program and human resource officials,  to develop USAID’s human capital strategy. USAID’s human capital  strategy has not been finalized or approved by the Office of Management  and Budget and the Office of Personnel Management. In addition, we were  unable to determine whether the draft human capital strategy is linked to  the agency’s overall strategic plan, as we recommended in 1993. USAID’s  strategic plan for fiscal years 2004 through 2009—a joint plan with the  State Department—is also in draft and not planned for issuance until the  end of fiscal year 2003.
In addition to its human capital strategy development, as part of the effort  to comply with the President’s Management Agenda, the USAID  Administrator established a group in January 2003 to develop criteria for  overseas staffing and to rationalize the deployment of foreign service  officers overseas. The group subsequently developed—and the  Administrator approved—a template for staffing overseas missions that  gives most weight to the dollar size of the country program but also  considers the relative performance of the host governments and provides  some flexibility to the regional bureaus as necessary.
Involving employees and stakeholders in the strategic workforce planning  process is also important to encourage support and understanding for its  outcomes. According to a USAID senior official, the human capital  subcommittee has involved some internal groups in the planning process  through the use of working groups that include senior and mid-level  employees. In addition, according to USAID officials, the Administrator  has discussed his human capital initiatives and answered questions at  “town hall” meetings with USAID employees. However, because the  strategy is still in draft, we cannot comment on the extent to which agency  staff will be involved in implementing the strategy. Historically, USAID has  established many internal committees to analyze workforce planning  problems but has not always followed through in implementing their  recommendations. In addition, according to senior USAID officials, the  agency has not included nongovernmental organizations and other  implementing partners in the development of its human capital strategy.
section_title: USAID’s Efforts to Identify Critical Skills and Competencies Are Limited by Inadequate Personnel Information
paragraphs: USAID has begun to identify the core competencies needed by its  workforce, and it recently established a working group to conduct  workforce analysis and planning related to core USAID competencies.  However, it has not documented the critical skills and competencies of its  current workforce, and its personnel information system does not always  provide reliable and timely data. USAID must determine the critical skills  and competencies required to meet its current and anticipated strategic  program goals. This is especially important as changes in national security,  technology, and other factors alter the environment within which foreign  policy agencies operate. In addition, like many other federal agencies,  USAID’s workforce is increasingly eligible for retirement, creating an  opportunity to refocus its workforce competencies to those geared toward  the critical skills and competencies it will need in the future. To meet  these challenges effectively, USAID needs to know its present workforce  skills and competencies and identify those that are critical to achieving its  strategic goals.
Effective workforce planning and management require that human capital  staff and other managers base their workforce analyses and decisions on  complete, accurate, and timely personnel data. However, USAID’s  personnel information system is not entirely accurate and does not  contain all of the information USAID needs for sound workforce decision  making. For example, a recent audit of USAID’s human capital data by its  Inspector General found that the data collected through this automated  process were not current, consistent, totally accurate, or complete.  USAID is attempting to address its personnel information system problems  through a recently implemented Web-based application that will allow for  customized, centralized, and real-time reporting. As of mid-June 2003,  about 85 percent of the missions had submitted data through the new  system. Officials at the human resource office, in responding to a draft of  this report, expect this new system to be fully operational in time to  generate the September 30, 2003, worldwide staffing report.
Nevertheless, USAID has no systematic or agencywide method to  determine the skills and competencies of its current staff. Although the  new personnel database will provide better information on the locations  and position categories of its staff, it is not designed to identify current  critical skills and competencies. According to officials from the human  resource office, the new system will provide the position occupational  code for all employees, but this will not include information on current  skills and abilities. However, as part of its draft human capital strategy, in  June 2003 USAID established a team to carry out a comprehensive  workforce analysis and planning effort. The team will first develop a pilot  workforce plan, including an analysis of current skills and future needs, in  three headquarters offices—human resources, procurement, and global  health. One of the working group’s tasks is to identify an appropriate tool  to collect, store, and manage data on competencies, training, and career  development.
USAID’s overseas assessment team also developed findings and made a  number of recommendations regarding USAID’s model for delivering  assistance and the types of skills that the agency will need to meet future  program needs. For example, according to the team’s study, USAID’s  foreign service recruitment should focus more on basic agency operational  skills such as program and project development, financial management,  procurement, and legal expertise. The study notes that these abilities are  essential for missions in developing programs, policies, and strategies;  ensuring accountability; and representing U.S. government interests with  host government officials and other stakeholders. Furthermore, according  to the study, due to the shortage of U.S. direct-hire foreign service staff,  about 160 personal services contractors currently serve in these positions,  which USAID considers inherently governmental functions and normally  fills with U.S. direct-hire staff.
section_title: USAID’s Strategies to Address Critical Skill Gaps Are Not Comprehensive
paragraphs: Although USAID has implemented some recruitment strategies to address  attrition concerns and staffing gaps, the strategies are limited to certain  segments of the workforce. Furthermore, USAID cannot be certain that  these measures will be effective, because the recruitment plans have not  been based on analyses that match current skills with those needed to  meet future strategic goals. Our strategic human capital model stresses the  importance of developing human capital strategies—the programs,  policies, and processes that agencies use to build and manage their  workforces—that are tailored to agencies’ unique needs. Applying this  principle to strategic workforce planning means that agencies consider  how hiring, training, staff development, performance management, and  other human capital strategies can be used to eliminate gaps and gain the  critical skills and competencies needed in the future.
USAID has implemented specific workforce strategies for some segments  of its workforce to address shortages in critical skills and competencies,  but these efforts are not comprehensive. Since fiscal year 1999, USAID has  hired more than 200 mid-level foreign service officers through its New  Entry Professionals program and 47 civil service employees through the  Presidential Management Intern program. The agency recently reinstituted  its International Development Intern program for junior foreign service  officers and plans to make 15 offers in March 2004. According to USAID  officials, the agency is hiring staff with updated technical and management  skills. These measures are important efforts to bring in experienced mid- level staff and junior staff with new skill sets that can help shape the  agency’s future as the current workforce becomes eligible for retirement.  However, USAID has not developed a workforce plan for its civil service  staff—a factor noted by OMB in its Presidential Management Agenda  “scorecard” of USAID’s human capital management efforts. In responding  to our draft report, USAID stated that it will not refine its civil service  recruitment plan until its workforce analysis is complete. In the meantime,  the current civil service plan calls for hiring about 15 Presidential  Management Interns a year, allowing offices to replace civil service staff in  accordance with approved reorganization plans, and hiring above  established ceilings for critical staff needs, such as contracts officers.  USAID also has not yet developed workforce plans for its personal  services contractors, who make up the majority of its workforce, although  USAID plans to do so in response to a recommendation by its Inspector  General.
In addition to its recruitment efforts, USAID has revived certain training  programs that were halted during the 1990s, such as executive leadership  training and management programs. However, these target mostly senior  management, according to a USAID survey of civil service employees. In  responding to our draft, USAID noted that its leadership training is  conducted at three levels—emerging, senior, and executive—and that its  challenge is to broaden such training and make it more available. USAID  also noted that it needs to offer entry-level training to all staff, not just  foreign service officers. In addition, the agency is revising its training  curriculum to provide more online training opportunities for all staff.
USAID’s personnel information system has not always provided accurate  data, and the agency has not undertaken a comprehensive analysis of the  skills and competencies of its current staff and matched this data to future  requirements. As a result, USAID cannot ensure that its recruitment plans  accurately reflect its hiring needs. Since 1999, missions have been required  to submit staffing projections as part of USAID’s annual report and budget  justification process. The human resource office uses this information to  develop its annual foreign service recruitment and training plans.  According to a human resource official, the recent overseas staffing  assessment will result in better guidance to the field and to headquarters  offices on reporting their staffing needs.
section_title: USAID Has Not Created a System to Monitor and Evaluate Its Progress
paragraphs: Because USAID’s human capital strategy is still in draft and not yet  approved, we cannot comment on whether its action plan will have  specific timetables and indicators to evaluate its progress in meeting its  human capital goals and to help ensure that these efforts continue under  the leadership of successive administrators. Strategic workforce planning  entails the development and use of indicators to measure both the  progress in achieving human capital goals and how the outcomes of these  strategies can help an organization accomplish its mission and  programmatic goals. USAID has had difficulties in defining practical,  meaningful measures that assess the impact of human capital strategies on  program results. For example, USAID’s fiscal year 2002 performance plan  continues to emphasize the agency’s efforts to achieve activity-oriented  goals, such as the number of employees hired or trained, but these  measures do not help gauge how well USAID’s human capital efforts  helped the agency achieve its programmatic goals. As a result, the link  between specific human capital strategies and strategic program outcomes  is not clear.
section_title: Conclusions
paragraphs: USAID has evolved from an agency consisting primarily of U.S. direct-hire  foreign service officers who directly implemented development projects to  one in which foreign service officers manage and oversee development  programs and projects carried out by institutional contractors and  grantees. Since 1992, the number of U.S. direct-hire staff has decreased by  37 percent, but the number of countries with USAID programs has almost  doubled. In addition, USAID program funding increased 57 percent in  fiscal years 2002 and 2003. As a result, USAID has increasingly relied on  contractor staff—primarily personal services contractors—to manage its  day-to-day activities overseas. In addition to having fewer U.S. direct-hire  foreign service officers to provide direction and accountability for its  foreign assistance programs, USAID operates in overseas environments  that present unique challenges to its ability to manage a quality workforce.  With fewer and less experienced U.S. direct-hire staff managing increasing  levels of foreign assistance in more countries, along with expected  increases in program funds for Afghanistan and Iraq, significant funding  increases for the global initiative to fight human immunodeficiency  virus/acquired immune deficiency, and potential USAID involvement in the  Millennium Challenge Account, USAID’s ability to provide oversight over  its foreign assistance activities and pursue U.S. foreign policy objectives is  becoming increasingly difficult. Because USAID has not adopted a  strategic approach to workforce planning and management, it cannot  ensure that it has addressed these challenges appropriately and identified  the right skill mix and competencies needed to carry out its development  assistance programs.
section_title: Recommendations for Executive Action
paragraphs: To help ensure that USAID can identify its future workforce needs and  pursue strategies that will help its workforce achieve the agency’s goals,  we recommend that the USAID Administrator develop and institutionalize  a strategic workforce planning and management system that reflects  current workforce planning principles. This effort should include the  implementation of a reliable personnel information system, an agencywide  assessment of staff’s skills and abilities, workforce strategies that address  identified staffing gaps in the foreign and civil services, and a periodic  evaluation of how these efforts contribute toward the achievement of the  agency’s program goals.
section_title: Scope and Methodology
paragraphs: To determine how workforce changes have affected USAID’s ability to  carry out its mission, we reviewed the agency’s workforce planning  documents and a number of internal and external reports on USAID’s  human capital and workforce planning issues. We also interviewed  knowledgeable USAID officials representing the agency’s regional,  technical, and management bureaus in Washington, D.C., and conducted  fieldwork at seven overseas missions—the Dominican Republic, Ecuador,  Egypt, Mali, Peru, Senegal, and the West Africa Regional Program in Mali.  To ensure consistency in our data collection efforts, we used the same  data collection instrument at each location. We also administered a  separate data collection instrument at USAID’s human resource office in  Washington, D.C. In examining the changes in USAID’s workforce since  1990, we analyzed personnel data provided by USAID and internal and  external reports on the changing roles of USAID’s workforce. We did not  formally verify the accuracy of USAID’s data; however, we noted in our  findings that USAID’s personnel data were not entirely accurate, complete,  or up to date.
To examine USAID’s progress in developing and implementing a strategic  workforce planning system, we evaluated the agency’s efforts in terms of  principles used by leading organizations that we identified through our  work with the Office of Personnel Management, other U.S. government  agencies, the National Academy for Public Administration, and the  International Personnel Management Association. We analyzed USAID’s  workforce planning documents, reviewed internal and external reports on  its human capital and workforce planning efforts, and interviewed  cognizant USAID officials at its Bureau for Management and its Bureau for  Policy and Program Coordination.
We conducted our work between July 2002 and June 2003 in accordance  with generally accepted government auditing standards.
section_title: Agency Comments and Our Evaluation
paragraphs: USAID provided written comments on a draft of this report (see app. III).  It concurred with our major findings and recommendations and noted that  our work grasped the agency’s complex human capital situation. USAID  also reiterated that it recently established a working group to carry out an  integrated workforce analysis and planning effort. According to USAID,  this effort will assess the critical skills and competencies of its workforce,  identify the gaps between what the agency currently has and what it will  need in the future, and design workforce strategies to fill those gaps.  USAID also provided separate technical comments on our draft, which we  have incorporated as appropriate.
As arranged with your office, we plan no further distribution of this report  for 30 days from the date of the report unless you publicly announce its  contents earlier. At that time, we will send copies to interested  congressional committees and to the Administrator, USAID; the Secretary  of State; and the Director, Office of Management and Budget. We will also  make copies available to others upon request. In addition, this report will  be available at no extra charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-4128 or at FordJ@gao.gov. Other contacts and staff  acknowledgments are listed in appendix IV.
section_title: Appendix I: Selected Reports Related to USAID’s Workforce Planning
paragraphs: Strengthen workforce planning and better  planning, greater focus on recruitment,  more training opportunities, and  increased retention. link workforce planning to the agency’s  mission.
Human resources department is not  effective.
Develop definitions and requirements so  and maintained was not up to date,  consistent, totally accurate, or complete. reported data is on time, consistent,  accurate, and complete.
Provide training for staff members who  enter and correct personnel data.
Develop procedures for missions to attest  to the accuracy of their workforce data.
Institute process to collect data on the  reasons for employee attrition.
Develop workforce plans for USAID’s civil  and nondirect-hire workforce.
USAID Office of the Inspector General,  Audit of USAID’s Workforce Planning for  Procurement Officers, Audit Report  Number 9-000-03-001-P (Washington,  D.C.: Nov. 13, 2002).
USAID has not developed a  comprehensive workforce plan that  covers its entire procurement workforce.
USAID needs to develop a comprehensive  workforce plan for the USAID procurement  workforce.
U.S. General Accounting Office, Foreign  Assistance: Disaster Recovery Program  Addressed Intended Purposes but USAID  Needs Greater Flexibility to Improve Its  Response Capability, GAO-02-787  (Washington, D.C.: July 24, 2002). affected the initial pace of program  implementation.
USAID lacked a “surge capacity” to  quickly design and implement a large- scale program with relatively short time  frames.
Implement procedures to (1) allow USAID  to quickly reassign key personnel, (2) allow  missions to expedite the hiring of  contractor staff, and (3) facilitate  coordination with other U.S. government  agencies involved in reconstruction.
Foreign and civil service new hires must  precedence over long-term workforce  planning needs. possess managerial and analytical skills.
Lack of training. hired and what should be contracted.
Limited hiring of entry-level staff.
Agency’s program budget increased, but  its workforce decreased for 10 years.
USAID has significant barriers to  workforce planning.
Establish a workforce planning committee  to identify program needs on a continuing  basis.
Reduce the number of personnel  backstops and develop qualifications in  multiple skills categories.
Create an inventory of staff work history,  experience, skills, and abilities.
Adopt a single unified personnel system.
U.S. General Accounting Office, Foreign  Assistance: AID Strategic Direction and  Continued Management Improvements  Needed, GAO/NSIAD-93-106  (Washington, D.C.: June 11, 1993).
Develop and implement a comprehensive  changing.
Workforce lacked needed skills.
USAID had not adequately planned for  workforce planning and management  capability as a systematic, agencywide  effort. workforce needs.
Institutionalize this capability to ensure its  continuation by successive administrations.
Ineffective placement, training, and  recruitment constrained workforce  management.
Determine the desired general composition  workforce planning system. of the direct-hire workforce and develop a  plan for reshaping the workforce along  those lines.
Conduct an individual skills profile of the  existing workforce and analyze it in the  context of the desired general composition  of the direct-hire workforce.  system to simplify, reduce, and thereby  broaden categories.
section_title: Appendix II: USAID Worldwide Foreign Assistance Programs Locations
subsections: section_title: Africa Region
paragraphs: Eastern Caribbean and Windward    Islands  Grenada  Montserrat  St. Kitts and Nevis  St. Lucia  St. Vincent and the Grenadines  Suriname  Trinidad and Tobago  Turks and Caicos Islands  Uruguay  Venezuela  USAID Regional Service Platforms. Services include legal, executive office, financial/controller,  procurement, and program and project development support services. Services vary among the 26 platforms;  for example, the regional office in Kenya provides all services to up to 14 countries, while the Honduras  mission simply shares a contracts officer with Nicaragua.
Jordan  Pakistan  Philippines  Thailand - Regional Development    Office (planned)
Bolivia (La Paz)  Dominican Republic (Santo Domingo)  El Salvador (San Salvador)  Guatemala (Guatemala City)  Honduras (Tegucigalpa)  Peru (Lima)
section_title: Appendix III: Comments from the U.S. Agency for International Development
section_title: Appendix IV: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the above named individuals, Kimberley Ebner, Jeanette  Espinola, and Rhonda Horried made key contributions to this report.  Martin de Alteriis, Mark Dowling, Reid Lowe, and José M. Peña, III,  provided technical assistance.