Human Capital Management: Effectively Implementing Reforms and Closing Critical Skills Gaps Are Key to Addressing Federal Workforce Challenges
Published: 2012-09-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO designated strategic human capital management as a governmentwide high risk area in 2001 because of a long-standing lack of leadership.
Since then, important progress has been made. However, the area remains high risk because of a need to address current and emerging critical skills gaps that undermine agencies' abilities to meet their vital missions.
The federal government is facing evolving and crosscutting challenges that require a range of skills and competencies to address. Moreover, retirements and the potential loss of leadership and institutional knowledge, coupled with fiscal pressures, underscore the importance of a strategic and efficient approach to acquiring and retaining individuals with needed critical skills.
This testimony is based on a large body of GAO work from January 2001 through September 2012 and focuses on the progress made by executive branch agencies, the CHCO Council, and OPM, and the challenges that remain in four key areas of human capital management: (1) leadership; (2) strategic human capital planning; (3) talent management; and (4) resultsoriented organizational culture.
section_title: What GAO Found
paragraphs: Since 2001, Congress, the Office of Personnel Management (OPM), and executive branch agencies have taken action to address the government's human capital challenges. For example, in 2002, Congress passed legislation creating the CHCO Council, composed of the Chief Human Capital Officers (CHCO) of 24 executive agencies and chaired by the Director of OPM. In 2004, through the Federal Workforce Flexibility Act, Congress provided agencies greater hiring flexibilities. OPM issued guidance on hiring reforms, developed the Hiring Toolkit, and launched an 80-day model to speed the hiring process.
Leadership:
The CHCO Council advises and coordinates the activities of member agencies on current and emerging personnel issues. Among its recent initiatives, OPM and the CHCO Council established a working group in September 2011 to identify and mitigate critical skills gaps. To date the group has taken important steps, including developing a framework and timeline for identifying and addressing government-wide and agency-specific skills gaps. However, the substantive work of addressing skills gaps remains, including defining workforce plans, implementing recruitment and retention strategies, and measuring the effects of these initiatives.
Strategic human capital planning:
Integrating human capital planning with broader organizational strategic planning is essential for ensuring that agencies have the talent and skill mix needed to cost-effectively execute their mission and program goals. If not carefully managed, anticipated retirements could cause skills gaps to develop further and adversely impact the ability of agencies to carry out their diverse responsibilities. GAO's work has identified skills shortages in areas government-wide, such as cybersecurity, acquisition management, and foreign language capabilities.
Talent management:
Ensuring that federal agencies are able to recruit, develop, and retain personnel with the necessary skills is essential to closing any skills gaps and maintaining a workforce that will meet its vital missions. Congress, OPM, and some individual agencies have taken important actions, such as providing and using flexibilities, to improve the hiring process and making investments in training and development. However, much work remains. For example, GAO recently reported that OPM can improve its guidance and assistance to agencies in establishing a process for setting and prioritizing training investments.
Results-oriented organizational culture:
Leading organizations have found that to successfully transform themselves they must often fundamentally change their cultures to be more results-oriented, customer-focused, and collaborative. As part of that, GAO has shown that agencies need to create clear "lines of sight" that align organizational and individual performance. These lines of sight help individual staff understand the connection between their daily activities and agency success.
section_title: What GAO Recommends
paragraphs: Over the years, GAO has made numerous recommendations to agencies and OPM to improve their strategic human capital management efforts. This testimony discusses agencies' actions to implement key recommendations.

section_title: Letter
paragraphs: Thank you for the opportunity to be here this afternoon to discuss the  state of the federal workforce. My remarks today will focus on the  progress made in modernizing federal human capital policies and  procedures since 2001, the year in which we first added strategic human  capital management to our list of high risk areas because of the long- standing lack of leadership on personnel matters.
Mr. Chairman, today’s session is a fitting venue to discuss the progress of  civil service reforms because so many of the improvements in the federal  government’s human capital policies and practices came about as a  result of the bipartisan leadership and vision of this Subcommittee  including legislation, hearings, constructive oversight, requests for our  research, and efforts to hold agencies accountable for results.
Congress, the Office of Personnel Management (OPM), and individual  agencies have all made substantial progress in addressing their human  capital challenges. For example, Congress, in 2002, created the chief  human capital officer (CHCO) position in 24 agencies to advise and assist  the head of the agency and other agency officials in their strategic human  capital efforts.advises and coordinates the activities of members’ agencies, OPM, and  the Office of Management and Budget (OMB) on such matters as  modernizing human resources systems and improving the quality of  human resources information. Further, in 2002 and 2004, Congress  provided agencies—individually and across the federal government—with  additional authorities and flexibilities to manage the federal workforce  such as the authority to offer recruitment bonuses. More recently,  Congress enacted the Telework Enhancement Act of 2010, which is  intended to provide opportunities for more federal employees to telework.
The CHCO Council—chaired by the OPM Director— It is important that the government have a top-notch workforce.  Addressing challenges in areas such as disaster response, homeland  security, economic security, and many other evolving issues requires  networks of actors across many organizations employing a wide range of  expertise and skills. For federal agencies to be effective in this  environment, they must have the capacity to work seamlessly with other  agencies, levels of government, and across sectors.
While the government has taken on additional roles and responsibilities in  recent years, the size of the federal workforce has changed little since  1981. While there have been some fluctuations, overall the number of  federal employees has remained relatively steady at around 2 million  people, with 2.2 million civilian, non-postal employees in 2011. That said,  the federal workforce is supported by a large number of contract  employees who also need to have the right set of skills. Although the  exact size of the contractor workforce is difficult to measure, at some  agencies it is significant and can far exceed the number of federal  personnel. For example, as we pointed out in our April 2012 report, the  National Nuclear Security Administration—a component of the  Department of Energy responsible for ensuring the safety and security of  the nation’s nuclear weapons stockpile—is composed of about 34,000  contractors and 2,400 federal employees.
These evolving and complex challenges are occurring while agencies  confront an array of internal management capacity difficulties, such as  critical skills shortages, ongoing retirements that could lead to a further  loss of institutional knowledge, as well as fiscal pressures. is vital that agencies operate more strategically and efficiently than ever  before.
As a result, it  The challenges confronting government demand that federal agencies  follow high-performing organizations’ human capital management  practices including recruiting and retaining employees able to create,  sustain, and thrive in organizations that are flatter, results-oriented, and  externally focused; and collaborate with other entities across levels of  government and with the private and non-profit sectors.
For more on the management capacity issues confronting agencies, see GAO-11-278.
As requested, my remarks today will focus on executive branch agencies’  and OPM’s progress in addressing key aspects of strategic human capital  management including: (1) leadership commitment; (2) strategic human  capital planning; (3) talent management; and (4) building a results- oriented culture. This testimony is based on a large body of our  completed work issued from January 2001 through September 2012, and  also includes the preliminary results of an ongoing study that you  requested on addressing critical skills gaps. The work on which this  statement is based was conducted 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.
subsections: section_title: Sustained Leadership is Essential to Successful Human Capital Management
paragraphs: Effective leadership is the key driver of successful human capital  management. Simply put, the tone starts from the top. As one example, in  September 2011, OPM and the CHCO Council, as part of ongoing  discussions between OPM, OMB, and us on progress needed to address  the federal government’s human capital high risk area, established a  working group to identify and mitigate critical skills gaps. At the request of  this Subcommittee, we are reviewing the progress of the working group.  Our preliminary findings show that the working group has, to date, taken  some important steps forward, including developing a framework and  timeline for identifying and addressing both government-wide and  agency-specific skills gaps.
Importantly, the effort is receiving the commitment and support of agency  leadership. For example, agencies’ chief human capital officers and their  representatives were involved in forming the working group and  participated in its deliberations. Further, the working group’s efforts were  designated a cross-agency priority goal within the Administration’s fiscal  year 2013 federal budget. The working group expects to complete its  initial efforts in March 2013. We will continue to assess the working  group’s progress and anticipate issuing a report to you later this year.
In addition, OPM has demonstrated leadership in its efforts to improve the  hiring process, with an eye toward making it easier and faster for people  to apply for a federal job and strengthen the ability of agencies to  compete with the private sector for filling entry-level positions. For  example, OPM issued final regulations implementing the Pathways  Programs (Pathways) which took effect on July 10, 2012. Pathways  created two new conduits into government service: the Internship  Program for students currently in high school, college, and other  qualifying programs, and the Recent Graduates Program for individuals  who, within the previous two years, earned an associate, bachelors,  masters, professional or other qualifying degree or certificate. Pathways  also modified the existing Presidential Management Fellows Program  making it more student friendly by, among other changes, expanding the  eligibility window for applicants. Individuals in all three programs are  eligible for noncompetitive conversion to permanent positions after  meeting certain requirements. If successfully implemented, initiatives  such as the CHCO working group and Pathways could help agencies  identify and close critical skills gaps.
Still, work is needed in other human capital areas. For example, as we  noted in our February 2012 testimony before this Subcommittee, OPM  needs to improve the paper-intensive processes and antiquated  information systems it uses to support the retirement of civilian federal  employees in part because of the volume of retirement processing  expected in the coming years given projected retirement trends.
section_title: Strategic Human Capital Planning is Critical to Addressing Workforce Challenges
paragraphs: Strategic human capital planning that is integrated with broader  organizational strategic planning is essential for ensuring that agencies  have the talent, skill, and experience mix they need to cost-effectively  execute their mission and program goals. Workforce planning is  especially important now because, as shown in figure 1, agencies are  facing a wave of potential retirements. Government-wide, around 30  percent of federal employees on board at the end of fiscal year 2011 will  become eligible to retire by 2016. At some agencies, however, such as  the Department of Housing and Urban Development and the Small  Business Administration, at least 40 percent of those on board at the end  of fiscal year 2011 are already eligible or will become eligible to retire in  the next five years. The government’s top leadership and management  ranks also face potentially high levels of retirement. About 58 percent of  senior executives and 45 percent of GS-15s who were on board at the  end of fiscal year 2011 will be eligible to retire by 2016. Likewise, certain  occupations face the potential of large numbers of retirements. Around 46  percent of air traffic controllers and 68 percent of administrative law  judges will be eligible to retire by 2016.
Although a number of factors affect when employees actually retire, a  2008 OPM study found that the median number of years an employee  stays with the government after first becoming retirement-eligible is four  years, although nearly 25 percent remain for nine years or more. not carefully monitored and managed, as experienced employees leave,  gaps could develop in an organization’s leadership and institutional  knowledge.
OPM, An Analysis of Federal Employee Retirement Data: Predicting Future Retirements  and Examining Factors Relevant to Retiring from the Federal Service (Washington, D.C.:  March, 2008).
GAO, Foreign Language Capabilities: Departments of Homeland Security, Defense, and  State Could Better Assess Their Foreign Language Needs and Capabilities and Address  Shortfalls, GAO-10-715T (Washington, D.C.: July 29, 2010). develop a comprehensive strategic plan with measurable goals,  objectives, milestones, and feedback mechanics that links all of State’s  efforts to meet its foreign language requirements. State generally agreed  with our recommendations and in response, in March 2011, it published a  strategic plan for foreign language capabilities that links its language  incentive program to its efforts to enhance its recruitment program and  expand training, among other activities.
Our prior work has also identified human capital planning issues at  individual agencies. For example, the Federal Emergency Management  Agency (FEMA) continues to face historical workforce planning and  training challenges that need to be addressed. In our April 2012,  assessment which we prepared for this Subcommittee and other  requesters, we reported that FEMA is in the early stages of integrating its  workforce planning and training efforts with initiatives underway by other  FEMA program offices. These efforts could help FEMA ensure that it  has a workforce of the proper size and skills to meet its mission.  However, we also noted that FEMA’s workforce planning and training  efforts could benefit from quantifiable performance measures, such as  metrics to gauge the agency’s progress building a comprehensive  leadership development program and integrating it with agency  succession planning. FEMA’s parent agency, DHS, concurred with our  recommendations and is taking steps to implement them. For example,  FEMA’s Strategic Human Capital Plan for fiscal years 2012 through 2016  will have milestones and metrics for addressing key workforce planning  efforts.
In another example, in our July 2012 report, we found that the  Department of the Interior continues to face workforce planning  challenges following a reorganization effort to improve its oversight of oil  and gas activities in the wake of the April 2010 oil spill in the Gulf of  Mexico. In particular, we found that Interior has not developed a strategic  workforce plan that outlines specific strategies to help it address the  recruitment, retention, and training challenges it is facing, particularly for  engineers and inspectors. Interior has also not specifically determined  when it will develop such a plan. To address this, we recommended that  the relevant components of Interior develop a strategic workforce plan  that, among other actions, determines the critical skills and competencies  that will be needed to achieve current and future programmatic results  and to develop strategies to address critical skills gaps. Interior agreed  with this recommendation.
section_title: Talent Management Remains a Federal Workforce Challenge
paragraphs: Progress in talent management has been made on a number of fronts.  However, our work had identified additional actions federal agencies can  take to recruit, develop, and retain personnel with the skills essential to  maintaining a workforce that will help agencies meet their vital missions.
subsections: section_title: Hiring Reforms
paragraphs: More than a decade ago, it was widely recognized that the federal hiring  process was lengthy and cumbersome and hampered agencies’ ability to  hire the people they needed to achieve their goals and missions. The  processes of that time failed to meet the needs of managers in filling  positions with the right talent and also failed to meet the needs of  applicants for a timely, efficient, transparent, and merit-based process.  The processes were also hampered by narrow federal classification  standards for defining federal occupations, the quality of certain applicant  assessment tools, and time-consuming processes to evaluate applicants.
Both Congress and OPM have taken a series of important actions over  the years to improve recruiting and hiring in the federal sector. For  example, in 2004 Congress provided agencies with hiring flexibilities that  (1) permit agencies to appoint individuals to positions through a  streamlined hiring process where there is a severe shortage of qualified  candidates or a critical hiring need, and (2) allow agency managers more  latitude in selecting among qualified candidates through category rating,  an alternative to the traditional numerical rating procedure which limited  selection to the top three ranked candidates. In addition, Congress  provided agencies with enhanced authority to pay recruitment bonuses  and with the authority to credit relevant private sector experience when  computing annual leave amounts.
In 2005, and again in 2008, OPM issued guidance on the use of hiring  authorities and flexibilities, in 2006 developed the Hiring Toolkit to assist  agency officials in determining the appropriate hiring flexibilities to use  given their specific situations, and in 2008 launched an 80-day hiring  model to help speed up the hiring process. Also in 2008, OPM  established standardized vacancy announcement templates for common  occupations, such as contract specialist and accounting technician  positions, in which agencies can insert summary information concerning  their specific jobs prior to posting for public announcement. As mentioned  earlier, in 2010, OPM launched the Pathways program in order to make it  easier to recruit and hire students and recent graduates.
Individual agencies have also taken actions to meet their specific needs  for acquiring the necessary talent. For example, we have reported that  the National Aeronautics and Space Administration has used a  combination of techniques to recruit workers with critical skills, including  targeted recruitment activities, educational outreach programs, improved  compensation and benefits packages, professional development  programs, and streamlined hiring authorities.many challenges remain with federal recruiting and hiring, as noted  earlier in discussing critical skills gaps.
section_title: Training and Development
paragraphs: Effective training and development programs are an integral part of a  learning environment that can enhance the federal government’s ability to  attract and retain employees with the skills and competencies needed to  achieve results. Agency training and development programs should be  part of an overall management strategy and include processes to assess  and ensure the training’s effectiveness. Our recent work has also  underscored the value of collaborative training.
For example, in our 2010 overview of 225 professional development  activities intended to improve interagency collaboration at nine key  national security agencies (including DOD, State, and DHS), we noted  that because no single federal agency has the ability to address these  threats alone, agencies must work together in a whole-of-government  approach to protect our nation and its interests. We found that  interagency training and other professional development activities build  foundational knowledge, skills, and networks that are intended to improve  collaboration across agencies. For example, in fiscal year 2009, the  military services or combatant commands led an estimated 84 joint- military exercise programs that addressed a range of national security  matters and sought to improve the ability of participants to work across  agency lines by encouraging interagency participation. In addition, DHS  offers an introductory online course which is available to personnel across  federal, state, and local government and provides an overview of the  roles and responsibilities of various agencies and how they are supposed  to work together in different emergency situations.
Some agencies also use interagency rotations as a type of professional  development activity that can help improve collaboration across agencies.  For example, Army’s Interagency Fellowship Program is a 10- to 12- month rotation that places Army officers in intermediate-level positions at  other federal agencies and allows them to learn the culture of the host  agency, hone collaborative skills such as communication and teamwork,  and establish networks with their civilian counterparts. In a 2012 report,  we identified key policies and practices that help such interagency  personnel rotation programs achieve collaboration-related results. These  policies and practices include, for example, the importance of creating  shared goals, establishing incentives, and undertaking careful  preparation.
Elsewhere, improvements are needed. Our work at State found that while  the department has taken many steps to incorporate the interrelated  elements of an effective training program, State’s strategic approach to its  workforce training still has several key weaknesses.lacks a systematic, comprehensive training needs assessment process,  incorporating all bureaus and overseas posts. State also lacks formal  guidance for curriculum design and for data collection and analysis, and  thus cannot be assured that proper practices and procedures are  systematically and comprehensively applied. Moreover, the performance  measures for training generally do not fully address training goals, and  are generally output- rather than outcome-oriented. We made several  recommendations for State to improve strategic planning and evaluation  of its efforts to train personnel, including improvements to State’s efforts  to assess training needs. State generally agreed with our  recommendations and noted that it would look for ways to enhance its  ability to assess the effectiveness of training and development efforts  across employee groups and locations. State has not yet provided us with  evidence that it has taken action to implement the report’s  recommendations.
More broadly, given current budget constraints, it is essential that  agencies identify the appropriate level of investment and establish  priorities for employee training and development, so that the most  important training needs are addressed first. Our report to you issued  earlier this week compared agencies’ training investment practices and  OPM guidance against leading federal training investment practices  identified from our past work and expert studies. included prioritizing investment funding; identifying the most appropriate  mix of centralized and decentralized approaches for training and  development programs; and tracking the cost and delivery of training and  development programs agency-wide.
GAO, Federal Training Investments: OPM and Agencies Can Do More to Ensure Cost- Effective Decisions, GAO-12-878 (Washington, D.C.: Sept. 17, 2012). that their components or sub-agencies are more knowledgeable about  their mission-specific training needs, while the central human capital staff  can add the most value by managing investment decisions for more  general training across the department. However, many CHCOs reported  that they do not set a level of investment agency-wide, do not prioritize  training agency-wide, and do not have information from component or  sub-agency leaders regarding their level of investments and priorities.  Consequently, agencies reported that they are duplicating internal training  investments and missing opportunities to leverage economies of scale  across their agencies. Officials from all four agencies we interviewed (the  Departments of Energy, the Interior, DHS, and Veterans Affairs) to obtain  additional perspective beyond our survey of 27 CHCOs reported that they  were unaware of the total amount their agencies invest in federal training  and cannot provide reliable training data to OPM, which requests these  data to address its government-wide training responsibilities.
We found that agencies independently purchase or develop training for  the same mandated or common occupational training. Several agencies  and OPM officials reported that a website administered by OPM to  provide training for the HR community could be expanded to provide  mandatory or other common training for federal occupations, which, OPM  reported, could save millions and help standardize training. We  recommended, among other things, that OPM improve guidance and  assistance to agencies in establishing a process for setting and  prioritizing training investments; improve the reliability of agency training  investment information; and identify the best existing courses that fulfill  government-wide training requirements and offer them to all agencies  through their existing online training platform or another appropriate  platform. OPM generally agreed with most of our recommendations.
section_title: Workforce Flexibilities
paragraphs: In broad terms, human capital flexibilities represent the policies and  practices an agency has the authority to implement in managing its  workforce to accomplish its mission and achieve its goals. The tailored  use of such flexibilities helps agencies recruit, develop and retain people  with the knowledge, skills, and abilities that agencies need to accomplish  their critical missions and compete with the private sector for top talent.  Human capital flexibilities include monetary incentives such as  recruitment, relocation, and retention bonuses; special hiring authorities  such as veteran-related hiring authorities; incentive awards such as  performance-based cash and time-off awards; and work-life policies and  programs such as flexible work schedules, telework, and child care  centers and assistance.
Our 2010 report on the use of recruitment, relocation, and retention  incentives found that these flexibilities were widely used by agencies, and  that retention incentives accounted for the majority of these incentive  costs. Our review of the steps OPM has taken to help ensure that  agencies have effective oversight of their incentive programs found that  while OPM provided oversight of such incentives through various  mechanisms, including guidance and periodic evaluations and  accountability reviews, there are opportunities for improvement. We  recommended that OPM require agencies to incorporate succession  planning efforts into the decision process for awarding retention  incentives. OPM agreed with our recommendation and stated that it will  develop future guidance on the importance of considering succession  planning in the decision process for awarding retention incentives. In  January 2011, OPM issued proposed regulations to add succession  planning to the list of factors an agency may consider before approving a  retention incentive for an employee who would be likely to leave the  federal service in the absence of the incentive. OPM has stated that  specifically listing this factor in the regulations will strengthen the  relationship between succession planning and retention incentives. OPM  expects to issue the final regulations before the end of 2012.
To assist and guide agencies in developing and administering their  work/life programs, OPM has established working groups, sponsored  training for agency officials, promulgated regulations implementing  work/life programs, and provided guidance. In our December 2010 report  on agencies’ satisfaction with OPM’s assistance, we found that most  agency officials were satisfied with OPM’s help, guidance, and  information sharing. At the same time, we determined that OPM is potentially missing opportunities to provide federal agencies with  additional information that may help them develop and implement  work/life programs. As such, we recommended that OPM more  systematically track data already being collected by individual federal  agencies on their work/life programs such as program usage, and share  this information with federal agencies. OPM agreed with our  recommendations and said it is exploring the use of a Web-based tool  that would provide an ability to collect data from agencies and present it  in a more meaningful and systematic manner. According to OPM, the  goal would be to allow users to note the connection between work/life  programs being offered and related outcomes/results, encouraging  agencies to engage in similar efforts.
section_title: Results-Oriented Cultures
paragraphs: Leading organizations have found that to successfully transform  themselves they must often fundamentally change their cultures so that  they are more results-oriented, customer-focused, and collaborative in  nature. An effective performance management system is critical to  achieving this cultural transformation. We have found that having a  performance management system that creates a “line of sight” showing  how unit and individual performance can contribute to overall  organizational goals helps individuals understand the connection between  their daily activities and the organization’s success. The federal  government’s senior executives need to lead the way in transforming their  agencies’ cultures. The performance-based pay system for members of  the Senior Executive Service (SES), which seeks to provide a clear and  direct linkage between individual performance and organizational results  as well as pay, is an important step in government-wide transformation.  The importance of explicitly linking senior executive expectations to  results-oriented organizational goals is consistent with findings from our  past work on performance management.
In January 2012, OPM and OMB released a government-wide SES  performance appraisal system that provides agencies with a standard  framework to managing the performance of SES members. While striving  to provide greater clarity and equity in the development of performance  standards and link to compensation, among other things, the Directors of  OPM and OMB stated that the new system will also provide agencies with  the necessary flexibility and capability to customize the system in order to  meet their needs. Effective implementation of this new system will be  important because, as we reported in 2008, OPM had found that some  executive performance plans in use at that time did not fully identify the  executives’ performance measures.
Leading organizations also develop and maintain inclusive and diverse  workforces that reflect all segments of society. Such organizations  typically foster a work environment in which people are enabled and  motivated to contribute to continuous learning and improvement as well  as mission accomplishment and provide both accountability and fairness  for all employees. As with any organizational change effort, having a  diverse top leadership corps is 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. In November 2008, we reported on the diversity of  the SES and the SES developmental pool, from which most SES  candidates are selected, noting that the representation of women and  minorities in the SES increased government-wide from October 2000  through September 2007, but increases did not occur in all major  executive branch agencies.
In November 2011, OPM reinforced the importance of promoting the  federal workplace as a model of equality, diversity, and inclusion through  the issuance of the Government-Wide Diversity and Inclusion Strategic  Plan. Organized around three strategic goals—workforce diversity,  workplace inclusion, and sustainability—the plan provides a shared  direction, encourages commitment, and creates alignment so that  according to OPM, agencies can approach their workplace diversity and  inclusion efforts in a coordinated, collaborative, and integrated manner.
In helping to ensure diversity in the pipeline for appointments to the SES  as well as recruitment at all levels, it is important that agencies have  strategies to identify and develop a diverse pool of talent for selecting the  agencies’ potential future leaders and to reach out to a diverse pool of  talent when recruiting. For example, to recruit diverse applicants,  agencies will need to consider active recruitment strategies such as  widening the selection of schools from which to recruit, building formal  relationships with targeted schools to ensure the cultivation of talent for  future applicant pools, and partnering with multicultural organizations to  communicate their commitment to diversity and to build, strengthen, and  maintain relationships.
To promote diversity and inclusion in the federal workforce OPM is also  focusing on increasing the hiring and retention of people with disabilities  and veterans.
In 2010, we were asked to identify barriers to the employment of people  with disabilities in the federal workforce and leading practices that could be  used to overcome these barriers. In response, we convened a forum to  identify leading practices that federal agencies could implement within the  current legislative context. Participants said that the most significant barrier  keeping people with disabilities from the workplace is attitudinal, which can  include bias and low expectations for people with disabilities. According to  participants, there is a fundamental need to change the attitudes of hiring  managers, supervisors, coworkers, and prospective employees, and that  cultural change within the agencies is critical to this effort.identified practices that agencies could implement to help the federal  government become a model employer for people with disabilities.
Participants  Also in July 2010, the President issued Executive Order 13548 to  increase the number of individuals with disabilities in the federal  workforce. Nearly two years after the executive order was signed, we  found that the federal government was not on track to achieve the  executive order’s hiring goals. To ensure that the federal government is  well positioned to become a model employer of individuals with  disabilities, we recommended that the Director of OPM incorporate  information about agency deficiencies in hiring individuals with disabilities  into its regular reporting to the President on implementing the executive  order; expedite the development of the mandatory agency training plans  required by the order; and assess the accuracy of the data used to  measure progress toward the order’s goals.recommendations and is taking steps to implement them.
Finally, the Uniformed Services Employment and Reemployment Rights  Act (USERRA) of 1994 protects the employment and reemployment rights  of federal and nonfederal employees who leave their civilian employment  to perform military and other uniformed services. And the Veterans’  Benefits Act of 2010 (VBA) directed the Department of Labor (Labor) and  Office of Special Counsel (OSC) to establish a 36-month demonstration  project (2011-2014) for receiving, investigating, and resolving USERRA  claims filed against federal executive agencies. The VBA also required  that we evaluate how Labor and OSC designed the demonstration project  and assess their relative performance during and after the demonstration  project.
In September 2012, as part of our mandated effort to assess the relative  performance of USERRA claim processing at Labor and OSC, we  determined that both agencies had implemented comparable processes  that should allow Congress to evaluate their relative performance at the  conclusion of the 3-year demonstration project established by  Congress. However, to improve agencies’ ability to assess relative  performance, we recommended that both agencies take additional steps  to ensure data integrity for the performance data they plan to report.
Although Labor and OSC neither agreed nor disagreed with our  recommendations, they discussed actions that they both plan to take to  implement our suggestions. For example, Labor said it will review cost  data on a quarterly basis for inconsistent or questionable data and correct  and report any identified data issues each quarter, as necessary. OSC  said it is reviewing its procedures for compiling and reporting cost data  during the demonstration project, and is committed to making any  necessary changes to ensure the demonstration project satisfies  Congress’s goals.
section_title: Concluding Observations
paragraphs: Strategic human capital management must be the centerpiece of any  serious effort to ensure federal agencies operate as high-performing  organizations. A high-quality federal workforce is especially critical now  given the complex, multi-dimensional issues facing the nation.  Achievement of this goal is challenging, especially in light of the fiscal  pressures confronting our national government.
When we first identified strategic human capital management as a high  risk area in 2001, it was because many agencies faced challenges in key  areas including leadership; workforce planning; talent management; and  creating results-oriented organizational cultures. Since then, the federal  government has made substantial progress in beginning to address  human capital challenges and, in many ways, is taking a far more  strategic approach to managing personnel. Through a variety of  initiatives, Congress, OPM, and individual agencies have strengthened  the federal human capital infrastructure. As a result of these  improvements, in 2011 we narrowed the focus of our high risk  assessment to closing current and emerging critical skills gaps. These  challenges must be addressed for agencies to cost-effectively execute  their missions and respond to emerging challenges.
In short, while much progress has been made over the last 11 years in  modernizing federal human capital management, the job is far from over.  Making greater progress requires agencies to continue to address their  specific personnel challenges, as well as work with OPM and through the  CHCO Council to address critical skills gaps. Central to success will be  the continued attention of top-level leadership, effective planning,  responsive implementation, and robust measurement and evaluation, as  well as continued congressional oversight to hold agencies accountable  for results.
Chairman Akaka, Ranking Member Johnson, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions.
section_title: Contacts and Acknowledgments
paragraphs: For further information regarding this statement, please contact Robert  Goldenkoff, Director, Strategic Issues, at (202) 512-6806, or  goldenkoffr@gao.gov, or Yvonne D. Jones, Director, Strategic Issues, at  (202) 512-6806, or jonesy@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 include Trina  Lewis, Assistant Director; Shea Bader, Analyst-in-Charge; Margaret Best,  Barbara Bovbjerg, Sara Daleski, Timothy DiNapoli, William Doherty,  Brenda Farrell, Michele Fejfar; Robert Gebhart, Shirley Jones, Steven  Lozano, Erik Kjeldgaard, Latesha Love, Signora May, Rebecca Rose,  Jeffrey Schmerling, Rebecca Shea, Wesley Sholtes and Jason  Vassilicos. Key contributors for the earlier work that supports this  testimony are listed in each product.
section_title: Appendix I: GAO Products Related to Federal Human Capital Issues
paragraphs: Federal Training Investments: OPM and Agencies Can Do More to  Ensure Cost-Effective Decisions. GAO-12-878. Washington, D.C.:  September 17, 2012.
Veterans’ Reemployment Rights: Department of Labor and Office of  Special Counsel Need to Take Additional Steps to Ensure Demonstration  Project Data Integrity. GAO-12-860R. Washington, D.C.:   September 10, 2012.
Oil and Gas Management: Interior’s Reorganization Complete, but  Challenges Remain in Implementing New Requirements. GAO-12-423.  Washington, D.C.: July 30, 2012.
Human Capital: HHS and EPA Can Improve Practices Under Special  Hiring Authorities. GAO-12-692. Washington, D.C.: July 9, 2012.
Managing for Results: GAO’s Work Related to the Interim Crosscutting  Priority Goals under the GPRA Modernization Act. GAO-12-620R.  Washington, D.C.: May 31, 2012.
Disability Employment: Further Action Needed to Oversee Efforts to Meet  Federal Government Hiring Goals. GAO-12-568. Washington, D.C.:   May 25, 2012.
Disaster Assistance Workforce: FEMA Could Enhance Human Capital  Management and Training. GAO-12-538. Washington, D.C.:   May 25, 2012.
Federal Emergency Management Agency: Workforce Planning and  Training Could Be Enhanced by Incorporating Strategic Management  Principles. GAO-12-487. Washington, D.C.: April 26, 2012.
Modernizing the Nuclear Security Enterprise: Strategies and Challenges  in Sustaining Critical Skills in Federal and Contractor Workforces.   GAO-12-468. Washington, D.C.: April 26, 2012.
Interagency Collaboration: State and Army Personnel Rotation Programs  Can Build on Positive Results with Additional Preparation and Evaluation.  GAO-12-386. Washington, D.C.: March 9, 2012.
OPM Retirement Modernization: Progress Has Been Hindered by  Longstanding Information Technology Management Weaknesses.   GAO-12-430T. Washington, D.C.: February 1, 2012.
Cybersecurity Human Capital: Initiatives Need Better Planning and  Coordination. GAO-12-8. Washington, D.C.: November 29, 2011.
Emergency Preparedness: Agencies Need Coordinated Guidance on  Incorporating Telework into Emergency and Continuity Planning.   GAO-11-628. Washington, D.C.: July 22, 2011.
High-Risk Series: An Update. GAO-11-278. Washington, D.C.:   February 16, 2011.
Department of State: Additional Steps Are Needed to Improve Strategic  Planning and Evaluation of Training for State Personnel. GAO-11-241.  Washington, D.C.: January 25, 2011.
Federal Work/Life Programs: Agencies Generally Satisfied with OPM  Assistance, but More Tracking and Information Sharing Needed.   GAO-11-137. Washington, D.C.: December 16, 2010.
National Security: An Overview of Professional Development Activities  Intended to Improve Interagency Collaboration. GAO-11-108.  Washington, D.C.: November 15, 2010.
Highlights of a Forum: Participant-Identified Leading Practices That Could  Increase the Employment of Individuals with Disabilities in the Federal  Workforce. GAO-11-81SP. Washington, D.C.: October 5, 2010.
Foreign Language Capabilities: Departments of Homeland Security,  Defense, and State Could Better Assess Their Foreign Language Needs  and Capabilities and Address Shortfalls. GAO-10-715T. Washington,  D.C.: July 29, 2010.
Human Capital: Continued Opportunities Exist for FDA and OPM to  Improve Oversight of Recruitment, Relocation, and Retention Incentives.  GAO-10-226. Washington, D.C.: January 22, 2010.
Department of State: Comprehensive Plan Needed to Address Persistent  Foreign Language Shortfalls. GAO-09-955. Washington, D.C.: September  17, 2009.
Human Capital: Sustained Attention to Strategic Human Capital  Management Needed. GAO-09-632T. Washington, D.C.: April 22, 2009.
Office of Personnel Management: Retirement Modernization Planning  and Management Shortcomings Need to Be Addressed. GAO-09-529.  Washington, D.C.: April 21, 2009.
Department of Defense: Additional Actions and Data Are Needed to  Effectively Manage and Oversee DOD’s Acquisition Workforce.   GAO-09-342. Washington, D.C.: March 25, 2009.
Human Capital: Diversity in the Federal SES and Processes for Selecting  New Executives. GAO-09-110. Washington, D.C.: November 26, 2008.
Results-Oriented Management: Opportunities Exist for Refining the  Oversight and Implementation of the Senior Executive Performance- Based Pay System. GAO-09-82. Washington, D.C.: November 21, 2008.
Department of Homeland Security: A Strategic Approach Is Needed to  Better Ensure the Acquisition Workforce Can Meet Mission Needs.   GAO-09-30. Washington, D.C.: November 19, 2008.
Office of Personnel Management: Improvements Needed to Ensure  Successful Retirement Systems Modernization. GAO-08-345.  Washington, D.C.: January 31, 2008.
NASA: Progress Made on Strategic Human Capital Management, but  Future Program Challenges Remain. GAO-07-1004. Washington, D.C.:  August 8, 2007.
Strategic Plan, 2007-2012. GAO-07-1SP. Washington, D.C.:   March 30, 2007.
Office of Personnel Management: Key Lessons Learned to Date for  Strengthening Capacity to Lead and Implement Human Capital Reforms.  GAO-07-90. Washington, D.C.: January 19, 2007.
Office of Personnel Management: Retirement Systems Modernization  Program Faces Numerous Challenges. GAO-05-237. Washington, D.C.:  February 28, 2005.
Diversity Management: Expert-Identified Leading Practices and Agency  Examples. GAO-05-90. Washington, D.C.: January 14, 2005.
High Risk Series: An Update, GAO-05-207. Washington, D.C.:   January 1, 2005.
Human Capital: Senior Executive Performance Management Can Be  Significantly Strengthened to Achieve Results. GAO-04-614. Washington,  D.C.: May 26, 2004.
Human Capital: A Guide for Assessing Strategic Training and  Development Efforts in the Federal Government. GAO-04-546G.  Washington, D.C.: March 1, 2004.
High-Performing Organizations: Metrics, Means, and Mechanisms for  Achieving High Performance in the 21st Century Public Management  Environment. GAO-04-343SP. Washington, D.C.: February 13, 2004.
Human Capital: Selected Agencies’ Experiences and Lessons Learned in  Designing Training and Development Programs. GAO-04-291.  Washington, D.C.: January 30, 2004.
Human Capital: Key Principles for Effective Workforce Planning,   GAO-04-39. Washington, D.C.: December 11, 2003.
Human Capital: Opportunities to Improve Executive Agencies’ Hiring  Processes. GAO-03-450. Washington, D.C.: May 30, 2003.
High-Risk Series: An Update. GAO-01-263. Washington, D.C.:   January 2001.
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