Human Capital: Selected Agencies Have Opportunities to Enhance Existing Succession Planning and Management Efforts
Published: 2005-06-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As the federal government confronts an array of challenges in the 21st century, it must employ strategic human capital management, including succession planning, to help meet those challenges. Leading organizations go beyond a succession planning approach that focuses on replacing individuals and engage in broad, integrated succession planning and management efforts that focus on strengthening current and future organizational capacity. GAO reviewed how the Census Bureau, Department of Labor (DOL), the Environmental Protection Agency (EPA) and the Veterans Health Administration (VHA) are implementing succession planning and management efforts.
section_title: What GAO Found
paragraphs: The Census Bureau, DOL, EPA, and VHA have all implemented succession planning and management efforts that collectively are intended to strengthen organizational capacity. However, in light of governmentwide fiscal challenges, the agencies have opportunities to enhance some of their succession efforts. While all of the agencies have assigned responsibility for their succession planning and management efforts to councils or boards, VHA has established a subcommittee and high-level positions that are directly responsible for its succession efforts. Also, VHA and the Census Bureau specifically mention succession planning and management as performance expectations in their executives' performance plans. The four agencies have begun to link succession efforts to strategic planning. For example, DOL plans to shift from a historical enforcement role to a compliance assistance and consulting role, requiring stronger skills in communication and analysis. To attract and retain employees with such skills, DOL launched the Masters in Business Administration Fellows program in 2002, which it considers one of its major succession training and development programs. Monitoring mission-critical workforce needs helps make informed planning decisions. DOL, EPA, and VHA have identified gaps in occupations or competencies, have undertaken strategies to address these gaps, and are planning or are taking steps to monitor their progress in closing these gaps. The Census Bureau could strengthen the monitoring of its mission-critical occupations more closely and at a higher level to ensure it is prepared for the 2010 Decennial Census. Effective training and development programs can enhance the federal government's ability to achieve results. All of the agencies' succession efforts include training and development programs at all organizational levels. However, in the current budget environment, there are opportunities to coordinate and share these programs and create synergies through benchmarking with others, achieving economies of scale, limiting duplication of efforts, and enhancing the effectiveness of programs, among other things. Performance measures for these programs can also help agencies evaluate these programs' effects on organizational capacity and justify their value. Finally, agencies have recognized the importance of diversity to a successful workforce and use succession planning and management to enhance their workforce diversity.

section_title: Letter
paragraphs: Large, escalating, and persistent deficits that are unsustainable over the  long term are among an array of challenges that the federal government  confronts in the 21st century. To help meet government’s challenges, we  have reported that agencies must employ strategic human capital  management. We also continue to designate strategic human capital  management as a high-risk area, one that threatens the federal  government’s ability to serve Americans effectively, because federal human  capital strategies are still not appropriately constituted to meet current and  emerging challenges or drive the transformations necessary for agencies to  meet these challenges. More specifically, agencies need to identify,  develop, and select the appropriate leaders, managers, and workforce to  meet 21st century challenges, and one critical step is through effective  succession planning and management. Leading organizations go beyond a  succession planning approach that focuses on simply replacing individuals  and engage in broad, integrated succession planning and management  efforts that focus on strengthening both current and future organizational  capacity. Particularly in an environment of likely continued budget  constraints, federal agencies must implement human capital strategies,  including succession planning and management, to transform their cultures  to achieve their long-term goals.
Congress has recognized the important role of succession planning and  management in preparing federal workers for the future. The Federal  Workforce Flexibility Act of 2004 requires the head of each agency to  establish, in consultation with the Office of Personnel Management (OPM),  a comprehensive management succession program to provide training for  employees and develop future managers for the agency. In addition, the  Chief Human Capital Officers Act led to the creation of a governmentwide  Chief Human Capital Officers (CHCO) Council, which subsequently  established a leadership and succession planning subcommittee. This  subcommittee’ s intended focus is on reviewing leadership development,  moving leaders from technicians to strategic thinkers, and meeting future  workforce needs in a planned manner. The act also calls for OPM to design  measures to assess, among other issues, the continuity of effective  leadership through the implementation of succession plans.
We previously identified how agencies in Australia, Canada, New Zealand,  and the United Kingdom are adopting a more strategic approach to  managing the succession of senior executives and other employees with  critical skills. We found that these agencies’ succession planning and  management efforts (1) receive active support of top leadership; (2) link to  the agencies’ strategic planning; (3) identify talent from multiple  organizational levels, early in their careers, or with critical skills; (4)  emphasize developmental assignments for high-potential employees in  addition to formal training; (5) address specific human capital challenges,  such as diversity; and (6) facilitate broader transformation efforts. We  observed that these experiences may prove valuable to agencies in the  United States.
As a follow up to that report, we reviewed how selected U.S. agencies are  implementing succession planning and management efforts. For purposes  of this report, we specifically address the first five practices given the  selected agencies’ immediate succession challenges. We selected agencies  based on the nature of these succession challenges as well as their diverse  organizational structures and missions.
Specifically, we reviewed the  Census Bureau, which has a unique, event-driven requirement, namely  the 2010 Decennial Census, and projected that 45 percent of its  workforce will be eligible to retire by 2010;  Department of Labor (DOL), which has reported a Senior Executive  Service (SES) retirement eligibility rate of more than 60 percent by the  beginning of fiscal year (FY) 2010;  Environmental Protection Agency (EPA), which has reported that  almost 60 percent of its SES will be eligible to retire by 2008 and  projected a loss of at least 20 percent of its supervisors in 10 of 18  priority occupations; and  Veterans Health Administration (VHA), which reported a 38 percent SES  retirement eligibility rate through 2008 and projects that 24 percent of  its Nurse Executives will be eligible for regular retirement in 2005.
To meet this objective, we analyzed strategic, human capital, workforce,  succession, and training and development plans; guidance for managers’  performance agreements; human capital team charters; and diversity  information from the selected agencies. In addition, we reviewed policies  and guidance on succession-related issues from OPM, as well as the Equal  Employment Opportunity Commission (EEOC) and the Merit Systems  Protection Board (MSPB) because of their responsibilities for ensuring the  fair application of personnel decisions, such as selection for training and  development programs. We also interviewed agency, OPM, EEOC, and  MSPB officials involved with strategic, human capital, and succession  planning and management. To get the varied perspectives of agencies’ staff  located in headquarters and regional offices, we interviewed agency  officials in Washington, D.C.; Charlotte, North Carolina; and Los Angeles  and San Francisco, California. Appendix I provides additional information  on our scope and methodology. We conducted our study from June 2004  through April 2005 in accordance with generally accepted government  auditing standards.
subsections: section_title: Background
paragraphs: We have found that other countries are experiencing challenges in  managing their human capital, and their experiences may prove valuable to  federal agencies in the United States. For example, they are using their  performance management systems to connect employee performance with  organizational success to help foster a results-oriented culture. They are  also implementing succession planning and management initiatives that are  designed to protect and enhance organizational capacity. Collectively,  these agencies’ initiatives demonstrated the following practices.
Receive active support of top leadership. Top leadership actively  participates in, regularly uses, and ensures the needed financial and  staff resources for key succession planning and management initiatives.  New Zealand’s State Services Commissioner, whose wide-ranging duties  include the appointment and review of public service chief executives,  formulated a new governmentwide senior leadership and management  development strategy.
Link to strategic planning. To focus on both current and future needs  and to provide leaders with a broader perspective, the Royal Canadian  Mounted Police’s succession planning and management initiative figures  prominently in the agency’s multiyear human capital plan and provides  top leaders with an agencywide perspective when making decisions.
Identify talent from multiple organizational levels, early in their  careers, or with critical skills. For example, the United Kingdom’s Fast  Stream program targets high-potential individuals as well as recent  college graduates, and aims to provide individuals with experiences and  training linked to strengthening specific competencies required for  admission to the Senior Civil Service.
Emphasize developmental assignments in addition to formal  training. Initiatives emphasize developmental assignments in addition  to formal training to strengthen high-potential employees’ skills and  broaden their experiences. For example, Canada’s Accelerated  Executive Development Program temporarily assigns executives to  work in unfamiliar roles or subject areas, and in different agencies.
Address specific human capital challenges, such as diversity,  leadership capacity, and retention. For example, the United Kingdom  created a centralized development program that targets minorities with  the potential to join the Senior Civil Service.
Facilitating broader transformation efforts. The United Kingdom  launched a wide-ranging reform program know as Modernising  Government, which focused on improving the quality, coordination, and  accessibility of the services government offered to its citizens and  restructured the content of its leadership and management development  programs to reflect this new emphasis on service delivery. In Australia,  to find individuals to champion recent changes in how it delivers  services and interacts with stakeholders, the Family Court of Australia  identifies and prepares future leaders who will have the skills and  experiences to help the organization successfully adapt to agency  transformation.
We at GAO have also undertaken a variety of succession planning and  management initiatives consistent with these leading practices to  strengthen our own internal efforts. For example, we have constructed a  detailed workforce planning model and analyzed it to ensure that it hired,  retained, and contracted for the appropriate number of staff with the  needed competencies. In addition, we have developed certain “people  measures” to assess its performance in human capital management,  including measures for the attraction and retention of staff, staff utilization  and development, and organizational leadership.
section_title: Agencies Reinforce Top Leadership Support by Assigning Responsibility for Succession Efforts
paragraphs: Effective succession planning and management programs have the support  and commitment of their organizations’ top leadership. Our past work has  shown that demonstrated commitment of top leaders is perhaps the single  most important element of successful management reform. We have  reported that to demonstrate its support of succession planning and  management efforts, top leadership actively participates in and regularly  uses these initiatives to develop and promote individuals, and ensures that  these programs receive sufficient resources. As a next step, federal  agencies are to hold their senior executives accountable to address human  capital issues, such as succession. We found that VHA has assigned  responsibility for succession planning and management initiatives to a  dedicated subcommittee, while DOL, the Census Bureau, and EPA have  councils or boards that are responsible for human capital more broadly,  including succession efforts.
VHA has established a subcommittee and high-level positions that are  directly responsible for succession planning and management. The  Succession and Workforce Development Management Subcommittee  reports to the Human Resources Committee of the National Leadership  Board, as illustrated in figure 1. VHA’s Chief Executive Officer—the  Department of Veterans Affairs’ Undersecretary for Health—chairs the  board, which consists of VISN directors, chief officers, and heads of  offices.
In addition, VHA has established (1) a workforce planner position to help  coordinate and manage VHA workforce planning activities, and (2) a nurse  workforce planner position to help respond to its nursing shortage and  consult with the workforce planner on certain issues, such as regional- specific recruiting challenges and training. Also, this year, VHA seeks to  establish a director of succession management, a senior executive-level  position. According to a VHA human capital official, the new director’s  duties will include overseeing national coordination of VHA’s succession  activities.
At DOL, the Management Review Board, chaired by the Assistant Secretary  for Administration and Management, is responsible for a variety of  business issues, including human capital. The board is composed of top  senior leaders from each of the agencies within DOL. According to DOL,  the board’s senior leaders helped garner support for departmentwide  succession planning and management efforts. For example, the board  recommended funding the development of departmentwide competencies  required for mission-critical occupations.
The Census Bureau’s Human Capital Management Council, consisting of  representatives from each of the Census Bureau’s directorates, reports to  the Deputy Director of Census. According to Census Bureau human  resource officials, the Council plays a key role in involving and advising top  leadership on human capital issues. For example, the Council developed  and presented a succession management plan that recommended, among  other things, piloting job rotations and assignments to address mission- critical priorities and resources. In addition, according to a Census Bureau  human resource official, the Council assesses various succession-related  issues, such as recruiting and competency development for the Bureau’s  senior management. In turn, senior management recently tasked a Council  representative to provide monthly updates on succession-related issues.
EPA’s Human Resources Council, composed of senior leaders who are to  advise the EPA Administrator on human capital issues, released EPA’s  “Strategy for Human Capital,” a planning document outlining EPA’s long- term human capital goals. The strategy names the offices responsible for  leading each of its goals. For example, the Office of Human Resources, the  Executive Resources Board, and human resources officers are to  implement a strategy to “Ensure the Continuity of Leadership, Critical  Expertise, and Agency Values through Succession Planning and  Management/Executive Development.” According to agency human capital  officials, EPA’s assistant and regional administrators and their senior  managers are responsible for executing succession planning initiatives.
As a next step, federal agencies are to hold their senior executives  accountable for human capital issues, thus explicitly aligning individual  performance expectations with organizational goals. VHA and the Census  Bureau specifically mention succession planning and management in their  executives’ performance plans. DOL and EPA senior executive  performance expectations also include aspects of succession planning and  management as part of more general human capital management  responsibilities.
At VHA, in their FY 2005 performance plans, chief officers and program  officials are to assure that the regional strategic plans address  workforce development, including a succession plan that projects  workforce needs. A VHA official also stated that VHA is considering  including specific succession-related performance measures, such as  turnover rates for selected priority occupations, in applicable executive  performance plans.
The Census Bureau’s FY 2005 executive performance plans state that  each senior executive “effectively develops and executes plans to  accomplish strategic goals and organizational objectives, setting clear  priorities and acquiring, organizing, and leveraging available resources  (human, financial, budget, etc.,) and succession planning to ensure  timely delivery of high quality services and products in compliance with  applicable laws, regulations and policies.” Senior executives are also to  demonstrate a planned approach to workforce development for  managers and staff.
At DOL, executives are to ensure that “staff are appropriately selected,  utilized, appraised, and developed…” Executives are also to develop the  talents of the staff and qualified candidates for positions in the  organization, according to DOL’s latest senior executive performance  management plan, revised in 2004.
EPA’ s FY 2004 performance plan for senior executives states that  executives should identify current and projected skill gaps and develop  strategies for addressing these gaps. According to an EPA executive  resource policy official, the FY 2005 senior executive performance plan  is under revision, but the expectations concerning skill gaps will not  change.
We have also reported that to demonstrate its support of succession  planning and management, top leadership ensures that these programs  receive sufficient financial and staff resources and are maintained over  time. DOL uses a centrally managed “crosscut fund” to supplement its  succession planning and management initiatives. Component agencies  within DOL submit project proposals, which DOL evaluates against  established criteria, such as supporting initiatives in the department’s  Human Capital Strategic Plan. According to DOL, from FY 2003-2004, the  agency allocated about $6.1 million for 18 human capital projects, such as  competency assessments for mission-critical occupations, and the  Management Development Program, one of DOL’s major succession  development programs. The Census Bureau, EPA, and VHA allocate money  to various programs, including succession efforts, intended to contribute to  human capital goals, but detailed funding information was not readily  available from the agencies.
section_title: Agencies Have Begun to Link Succession Efforts to Their Strategic Goals
paragraphs: Leading organizations use succession planning and management as a  strategic planning tool that focuses on current and future needs and  develops pools of high-potential staff in order to meet the organization’s  mission over the long term. That is, succession planning and management  is used to help the organization become what it needs to be, rather than  simply to recreate the existing organization. We have previously reported  on the importance of linking succession planning and management with the  forward-looking process of strategic planning. Specifically, discussing  how workforce knowledge, skills, and abilities will contribute to the  achievement of strategic and annual performance goals, how significant  gaps are identified, and what mitigating strategies are proposed (such as  hiring and training) can show the connection between succession planning  and strategic planning. All four agencies have begun to link their  succession planning to their strategic goals.
We previously reported that EPA’s human capital strategy lacked some key  elements, including the linking of human capital objectives to strategic  goals. Since then, EPA’s current strategic plan recognizes that human  capital management spans its 5 strategic goals and identifies specific  workforce knowledge, skills, and abilities to achieve each goal. For  example, as illustrated in figure 2, to achieve its goal for “Clean Air and  Global Climate Change,” EPA states that its workforce planning, hiring, and  training activities will emphasize risk assessment, including environmental- risk modeling and monitoring, economic analysis, and standard setting,  among other factors.
Separately, the succession plan states that the agency faces a number of  future challenges, such as global pollution, and identifies key drivers  shaping the agency’s future work, such as science and technology  advancements, budget constraints, administration priorities, agricultural  practices, public expectations, and the media’s influences. To respond to  these drivers, EPA states that its employees must have the capacity to build  stronger working partnerships, increase on-site problem solving, and  enhance internal and external communication practices.
As a component of VA, VHA recognizes VA’s strategic objective to “recruit,  develop and retain a competent, committed and diverse workforce that  provides high quality service to veterans and their families” in its Workforce  Succession Strategic Planning Guide. To achieve this objective, VHA  identifies a number of strategic assumptions about the future of veterans’  health care. For example, it states that health care delivery will become  more patient centered, that patients will be seen based on need instead of a  predetermined schedule, and the use of in-home and interactive technology  will increase, along with noninstitutional long-term care. Although VHA  states that technological advances will improve access and quality of care  for veterans, it does not anticipate significant impacts on the need for  health care professionals over the next 5 years, and expects to continue to  compete for scarce health care professionals in certain occupations.
DOL states that to meet its strategic goal of ensuring a competitive 21st  century workforce, it plans to identify skill gaps, assess training needs, and  recruit new employees. For example, DOL plans to shift from a historical  enforcement role to compliance assistance and consultation, requiring  stronger skills in communication and analysis. DOL seeks to develop more  skills in technology and project management as well as in strategic  planning, quantitative analysis, and analytical thinking for a more  “business-like” management approach. To attract and retain employees  with such skills, DOL launched the MBA Fellows program in 2002, which it  considers one of its major succession development programs. The 2-year  developmental program includes rotational assignments, mentoring, and  promotional opportunities for successful graduates. In FY 2004, DOL  reported retaining 89 percent of its MBA Fellows after 2 years.
Among the Census Bureau’s strategic goals is its unique requirement to  conduct the Decennial Census. According to the agency strategic plan, the  Bureau plans to reengineer the 2010 Census so that it “is cost-effective,  provides more timely data, improves coverage accuracy, and reduces  operational risk.” The agency will accomplish this by collecting  information on a yearly basis, enhancing address databases, using local  geographic information, and undertaking operational tests of these new  sources and methods. In its human capital plan, the Bureau acknowledges  that reengineering the 2010 Census requires new skills in project, contract,  and financial management; advanced programming and technology; and  statistics, mathematics, economics, quantitative analysis, marketing,  demography, and geography. To help obtain these skills, the Bureau has  established training programs and developed competency guides. For  example, it has instituted a Project Management Master’s Certificate  Program and an Information Technology Master’s Certificate Program. All  program managers now are to receive project management training.
section_title: Monitoring Mission-Critical Workforce Needs Helps Make Informed Succession Planning Decisions
paragraphs: Leading organizations use succession planning and management to identify  the talent required to achieve their goals. We have also identified key  principles for effective workforce planning including determining the  critical skills and competencies that will be needed to achieve current and  future programmatic results; developing strategies that are tailored to  address gaps in number, deployment, and alignment of human capital  approaches for enabling and sustaining the contributions of all critical  skills and competencies; and monitoring and evaluating the agency’s  progress toward its human capital goals and the contribution that human  capital results have made toward achieving programmatic results.
VHA, EPA, and DOL have identified gaps in occupations or competencies in  their mission-critical workforce to achieve their goals, have undertaken  strategies to address these gaps, and plan to or are taking steps to monitor  their progress. By doing so, they can make more informed planning  decisions and help appropriately focus succession efforts. While the  Census Bureau has identified and is recruiting for its mission-critical  occupations, it could achieve similar benefits if it more closely monitors its  mission-critical workforce as it plans for the 2010 Decennial Census.
VHA has identified 13 occupations it deems as national priorities for  recruitment and retention, including registered nurses, physicians, and  nuclear medicine technicians, among others. VHA uses a Web-based tool  with a workforce strategic planning template to help project its needs in  these mission-critical occupations. Each VISN completes a comprehensive  and detailed regional workforce assessment that projects staffing needs for  priority occupations for at least the next 5 years. These projections are  based on anticipated resignations, retirements, other separations, and  future mission needs. VHA’s workforce planner considers these data when  projecting national staffing needs. For example, as illustrated in figure 2,  VHA anticipates hiring 3,403 nurses in FY 2005 and 21,796 nurses from FY  2006 through FY 2011. This national projection includes, for example, the  VISN 16 assessment that it will need from 220 to 238 nurses from FY 2005  to FY 2008.
VHA also monitors and reports changes in its mission-critical workforce  based on these data. For example, VHA reports that it increased the total  nurses it had on-board by 6.2 percent or 2,184 from FY 1999 to FY 2004.  VHA states that the succession programs implemented since 1999 have  helped it to meet these mission-critical needs and, therefore, it does not  plan to implement additional programs.
We previously recommended that EPA comprehensively assess its  workforce needs. Subsequently, EPA identified 18 priority occupations,  including physical scientists, biologists, chemists, and attorneys. EPA  projects each occupation’s retirement, attrition, and accession rates based  on historical averages. For example, EPA estimates that approximately  20 percent of the managers and supervisors in 10 of the 18 priority  occupations will leave by 2008, mostly due to retirements. In addition,  human capital officials stated that the agency’s strategy has been on  strengthening mission-critical competencies among their priority  occupations. For example, EPA has identified 12 technical competencies,  such as information management and sciences and biological sciences, and  12 cross-occupational competencies, such as teamwork and oral  communication, that are essential for the agency to acquire, retain, or  develop to accomplish its future mission. EPA plans to address emerging  mission-critical competencies and gaps in priority occupations through  recruitment and development. EPA also plans to update its 2004 strategic  workforce planning effort on a cyclical basis to monitor progress in closing  any gaps, but the agency did not indicate specific time frames for these  updates.
DOL has identified 27 mission-critical occupations, such as investigators,  workforce development specialists, and mining engineers as well as the  skills needed for each occupation, which it specifies in competency  models. For example, for criminal investigators, DOL identified skills such  as external awareness and interpersonal communication in addition to the  knowledge and conduct of investigations. DOL has also inventoried the  skills of its on-board mission-critical workers through the department’s  mission-critical Skills Assessment Initiative. DOL reports that its  component agencies are developing action plans to reduce or close skill  gaps which DOL is incorporating into its human capital planning and  reporting process.
In addition, DOL has developed performance measures that are designed to  help it gauge its organizational capacity, as illustrated in figure 4. For  example, for FY 2004 DOL reported a 5 percent turnover rate of its mission- critical employees during their first year, meeting its goal of less than  10 percent. Likewise, DOL reported a 19.5 percent turnover rate during  their first 3 years, meeting its goal of less than 25 percent. In addition, DOL  reported a 95.4 percent FTE utilization rate, the percentage of filled and  authorized, full-time equivalent positions, for FY 2004, compared with a  98 percent goal.
FY 2004 (actual)
subsections: section_title: FTE Utilization
paragraphs: Annually The Census Bureau has identified its mission-critical occupations and is  recruiting for statisticians, mathematical statisticians, information  technology specialists, cartographers, and geographers on its employment  Web site. According to an agency human capital official, the Census Bureau  does not monitor or assess gaps in numbers by mission-critical occupation,  but focuses on “building infrastructure” by recruiting and developing  competencies. The same official stated that the Bureau delegates decisions  to line managers to fill vacancies, and thus there is no need to assess  workers by mission-critical categories. To assist these managers, the  Bureau reports that an electronic hiring system allows them to identify  competencies for each vacancy, and that line managers engage in a  continuing dialogue with senior managers, the Hiring Coordinators Group,  and the Human Capital Management Council to address hiring needs.  Nevertheless, while line managers are appropriately concerned with filling  vacancies, as noted earlier, the Bureau has also acknowledged that  reengineering the 2010 Decennial Census requires new competencies. By  not monitoring its mission-critical occupations more closely and at a higher  level, Census may not know overall if it is acquiring the skills it needs to be  prepared to conduct the 2010 Decennial Census as efficiently or effectively  as possible.
section_title: Enhanced Coordination and Evaluation of Training and Development Programs Could Help Leverage Scarce Resources
paragraphs: Effective training and development programs can enhance the federal  government’s ability to achieve results. Further, effective succession  planning and management efforts identify talent from multiple  organizational levels, early in their careers, or with critical skills as well as  provide both formal training and opportunities for rotational,  developmental, or “stretch” assignments, to strengthen high-potential  employees’ skills and to broaden their experience and perspective. While  all four agencies offer core succession training and development programs,  they each can seek opportunities to achieve efficiencies through more  coordination and sharing of these programs. In addition, establishing valid  measures to better evaluate how these programs affect organizational  capacity can give agency decision makers credible information to justify  training and development programs’ value.
subsections: section_title: Agency Succession Efforts Include Training and Development for Employees across Organizational Levels
paragraphs: All four agencies offer programs to train and develop their entry-, middle-,  and senior-level employees. These programs provide opportunities for  formal training, and all but one program offers rotational or developmental  assignments. Table 1 provides a summary of core succession training and  development programs by agency.
At the senior level, all four agencies have succession training and  development programs intended to enhance leadership skills, primarily  through SES candidate development programs. For example, EPA’s SES  Candidate Development Program—designed to prepare a cadre of leaders  to fill future vacant executive positions in the agency and to maintain  valuable institutional knowledge—requires candidates to complete an  executive development plan and work with an SES mentor and executive  coach to help define career goals and provide guidance. The program also  requires participants to complete at least 80 hours of formal leadership  development training, as well as complete a 4-month developmental  assignment. DOL and VHA have similar programs in place. The Census  Bureau, as a component of DOC, participates in DOC’s SES Candidate  Development Program.
The four agencies also have programs intended to develop the leadership  and supervisory skills for middle-level managers. For example, VHA’s  program named “VISN LEAD” provides an opportunity for high-potential  employees in field locations to receive coaching and mentoring, create a  personal development plan, and join with special VISN-wide project task  teams, while retaining their current responsibilities. EPA’s Mid-level  Development Programs, DOL’s Management Development Program, and  DOC’s Executive Leadership Development Program—in which the Census  Bureau participates—all offer similar opportunities.
At the entry level, all agencies have programs intended to develop  employees and provide them with the foundation for future leadership.  For example, DOL’s MBA Fellows program requires participants to take a  minimum of four rotational assignments and core training classes,  complete a personal development plan, and work with a senior-level  mentor, among other activities. Targeting recent MBA graduates, DOL  established its program not only to address increased departmentwide  needs for business and project-management skills, but also to create a  cadre of future department leaders. EPA’s Intern Program and Rotational  Program, VHA’s Facility LEAD Program, and DOC’s Aspiring Leaders  Development Program, in which the Census Bureau participates, are  similar in nature.
According to agency human capital officials, other programs also  contribute to their succession efforts. For example, the Census Bureau has  established certificate programs in project management and leadership for  all employees to develop and enhance these specific skills. The Bureau also  has a mathematical statisticians program, which, according to the Deputy  Director, provides career enhancement opportunities designed to help  develop and retain employees in this critical occupation. Similarly, DOL has  a Career Assistance Program that provides employees at all levels with  career planning advice and other development assistance. In addition, the  agencies use formal mentoring or coaching programs to help guide  employees throughout their career.
section_title: Coordination and Sharing of Training and Development Programs Can Achieve Efficiencies
paragraphs: As agencies implement their core succession training and development  programs, they must plan and prepare for the possibility of significant and  recurring constraints on their resources, in light of fiscal and budgetary  constraints. Recognizing this, leading agencies look for opportunities to  coordinate and share their efforts and create synergies through  benchmarking with others, achieving economies of scale, limiting  duplication of efforts, and enhancing the effectiveness of programs, among  other things. An example of such a coordinated and shared training effort  is the recent announcement of a new partnership by the Office of Federal  Procurement Policy, Department of Defense, and the General Services  Administration. The initiative is geared toward the civilian and defense  acquisition workforces, and is intended to provide similar training and  development opportunities for acquisition personnel across all three  agencies with the goal of sharing best practices, among other things.
OPM has begun to serve as a bridge for agencies to seek opportunities to  coordinate their succession training and development programs as it shifts  its role from less of a rule maker and enforcer to more of a strategic partner  in leading and supporting agencies’ human capital management. For  example, OPM established a governmentwide Federal Candidate  Development Program (Fed CDP). OPM expects the 14-month program to  help agencies meet their SES succession planning goals and contribute to  the government’s efforts to create a high-quality SES leadership corps.  Participating agencies may select, without further competition, people who  have successfully completed the Fed CDP training program. In addition, we  have testified that approaches to interagency collaboration, such as the  CHCO Council, have emerged as an important central leadership strategy and that agency collaboration can serve to institutionalize many  management policies governmentwide. The Leadership and Succession  Planning Subcommittee of the CHCO Council is charged with reviewing  leadership development, among other things, and is a possible mechanism  to help agencies coordinate succession training and development  programs.
While some agencies’ human capital officials acknowledged the potential  benefits of coordinating succession training and development programs  with other agencies or departments, they all could do more to seek  coordination and sharing opportunities. Cognizant human capital and  training officials stated that they had not actively sought opportunities to  coordinate core succession training and development programs. Although  EPA plans to select one senior executive through the Fed CDP, human  capital officials stated they had not extensively explored the idea of  coordinating with other agencies for their core succession training and  development. VHA human capital officials said they did not coordinate  further because they have specialized skill needs. DOL and Census Bureau  human capital managers also stated that they had not partnered with other  outside agencies to coordinate their core succession training and  development programs. By not actively seeking to coordinate and share  core succession training and development programs, agencies may miss a  potentially valuable opportunity to gain efficiency, which may be especially  important in the current budget environment.
section_title: Performance Measures Can Help Agencies Assess Programs’ Effects on Organizational Capacity
paragraphs: Decision makers need credible information to justify training and  development programs’ value. We have also reported that agencies need  credible information to assess how their training and development  programs affect organizational performance and enhance organizational  capacity. We have observed in our guide for assessing strategic training  and development that while not all training and development programs  require, or are suitable for, higher levels of evaluation, establishing valid  performance measures can ensure that agencies adequately address their  development objectives. Moreover, our guide states that such measures  should go beyond input and output data, and can include data on quality,  costs, and time. We also recognize, however, that agencies need to scale  their efforts depending on the program. Factors to consider when deciding  on the appropriate level of evaluation include the estimated costs of  training efforts, size of training audience, and program visibility, among  other things.
All four agencies are able to report on participation and cost related to their  succession training and development programs. For example, 12 Census  Bureau employees participated in DOC’s Aspiring Leaders Development  Program in FY 2004, with an average cost of $6,267 per participant,  according to the Bureau. In addition, the Census Bureau and DOL have also  identified outcome measures related to the performance of some of their  succession-related training and development programs. For example, the  Census Bureau evaluates, among other things, the extent to which certified  project managers are using the skills they have learned in the Project  Management Masters Certificate Program. Only DOL has identified  measures intended to provide an understanding of core succession training  and development programs’ effects on organizational capacity. Figure 5  illustrates a selection of these measures.
For example, by considering the retention rate for MBA Fellows, DOL can  make informed planning decisions about the potential availability of  certain skill sets in the department as well as when to initiate a new  program and how many students to include in it. DOL reported that in  FY 2004, it retained 89 percent of its MBA fellows after 2 years and has a  goal of 75 percent after 3 years. DOL also tracks SES “bench strength,” a  ratio of senior executives who are in training or have completed training to  those projected to leave. DOL reported a 96 percent “bench strength” for its  senior executives in FY 2004, exceeding its goal of 70 percent. The Census  Bureau, VHA, and EPA could better demonstrate their programs’ value in  providing future talent by identifying outcome-oriented measures and  evaluating the extent to which these programs enhance their organizations’  capacity.
section_title: Agencies Use Succession Efforts to Enhance Workforce Diversity
paragraphs: Leading organizations recognize that diversity, ways in which people in a  workforce are similar and different from one another, is an organizational  strength and that succession planning is a leading diversity management  practice. Given the retirement projections for the federal government that  could create vacancies, agencies can use succession planning and  management as a critical tool in their efforts to enhance diversity in their  leadership positions. All of the selected agencies have recognized the  importance of diversity to a successful workforce and use succession  planning and management efforts to enhance their workforce diversity.
VA requires all of its administrative staff offices to produce workforce and  succession plans aligned with overall VA strategic planning. VHA states  that although its overall workforce is fairly diverse, women and minorities  are not well represented in leadership positions nor are they well  represented in the pipeline to such positions. We have reported that VHA  has integrated diversity planning into its succession efforts. As part of  their regional succession plans, VISNs submit diversity information to VHA  for national planning. VHA then analyzes the diversity of its top-priority  occupations, highlights underrepresentation of certain demographic  groups in specific mission-critical occupations, and provides guidance to  focus recruiting efforts to enhance diversity. For example, VHA states that  White females and American Indian/Alaskan Native females are  underrepresented in the nurse occupation and advises that recruitment  efforts should focus on them. In addition, VHA tracks applicant diversity  for the Executive Career Field Candidate Development Program, one of VHA’s core succession training and development programs, and reports  that applicants to this program are drawn from a diverse pool.
EPA has stated in its human capital plan that a diverse workforce makes  the agency a more effective and healthy organization that is better able to  relate to the American people and develop more creative and workable  solutions. EPA credits its Intern Program, one of its core succession  training and development programs, with attracting and retaining a diverse  group of employees based on a 2003 assessment of the program. For  example, the assessment found that EPA interns were more ethnically  diverse than other comparable groups of hires. As part of its diversity  action plan, EPA reports that it is expanding targeted recruitment  initiatives to identify well-qualified candidates for mission-critical  occupations. In addition, regional offices report succession-related efforts  intended to enhance diversity initiatives, such as mentoring, leadership,  and career development programs, and workforce demographic analyses,  among other activities.
DOL identifies a strategic initiative to enhance diversity in management  and mission-critical occupations in its human capital plan. To help it  achieve this initiative, DOL monitors and evaluates diversity information  for its mission-critical occupations annually, and has identified “pockets of  low participation” for certain minority groups, such as Hispanics. In  addition, DOL has reported a higher percentage of women and Hispanics in  its three core succession training and development programs than in its  general workforce.
The Census Bureau has established a diversity program office to manage  the Bureau’s diversity efforts. Bureau officials stated that because of the  highly specialized nature of the Bureau’s work, such as the use of statistics  and mathematics, and the relatively small pool of people trained in these  areas, it is difficult to enhance diversity in several critical occupation  categories. As part of its combined diversity and recruiting initiative, the  Bureau has established a specific recruiting team for mathematical  statisticians, one of its highlighted mission-critical occupations. The  Bureau also has various targeted recruiting efforts at academic institutions  and community organizations with high Hispanic and other minority  enrollment, and various Hispanic or Latino Chambers of Commerce.
section_title: Conclusions
paragraphs: The Census Bureau, DOL, EPA, and VHA have all implemented succession  planning and management efforts that collectively are intended to  strengthen organizational capacity. Generally, these efforts receive top  leadership support, link with strategic planning, identify critical skills gaps  and strategies to fill them, offer training and development programs for  high-potential employees, and enhance diversity. Nevertheless, given the  nation’s large current budget deficit and long-range fiscal imbalance,  Congress is likely to place increasing emphasis on agencies to exercise  fiscal restraint.
Given this environment, these agencies can look for opportunities to  coordinate and share their succession training and development programs  to achieve economies of scale, limit duplication of efforts, increase  efficiency, and enhance the effectiveness of their programs. For example,  all four agencies emphasize rotational or developmental assignments and  formal training, and they may have opportunities to coordinate and share  these assignments and training with each other or other federal agencies or  departments. Agencies can also work with OPM and the CHCO Council to  determine how they can better leverage other agencies’ succession training  and development programs.
Furthermore, it is increasingly important for agencies to evaluate their  training and development programs to be able to demonstrate how these  efforts enhance organizational capacity. While the Census Bureau, EPA,  and VHA have some information on their succession training and  development programs, such as participation and cost, they can take  additional steps, such as enhanced evaluations, to justify these programs’  value. DOL has identified measures intended to provide an understanding  of these programs’ effects on organizational capacity.
Finally, although the Census Bureau has identified and is recruiting for its  mission-critical occupations, it can better monitor its mission-critical  workforce. By not monitoring more closely and at a higher level than line  managers, the Bureau may not know how to best focus its succession  planning efforts, and ultimately how well it is prepared for major tasks,  such as the 2010 Decennial Census.
section_title: Recommendations for Executive Action
paragraphs: To help agencies reinforce their succession planning and management  efforts, and make well informed planning decisions, we recommend a  number of actions.
The Secretary of Commerce should ensure that the Director of Census  takes the following three actions:  Strengthen the monitoring of its mission-critical workforce by  identifying mission-critical workforce gaps, developing strategies to  address gaps, evaluating progress toward closing gaps, and adjusting  strategies accordingly.
Seek appropriate opportunities to coordinate and share core succession  training and development programs with other outside agencies to  achieve economies of scale, limit duplication of efforts, benchmark with  high-performing agencies, keep abreast of current practices, enhance  efficiency, and increase the effectiveness of its programs.
Evaluate core succession training and development programs to assess  the extent to which programs contribute to enhancing organizational  capacity. When deciding the appropriate analytical approach and level  of evaluation, the Bureau should consider factors such as estimated  costs of training efforts, size of training audience, and program visibility,  among other things.
The Administrator of EPA should take the following two actions:  Seek appropriate opportunities to coordinate and share core succession  training and development programs with other outside agencies to  achieve economies of scale, limit duplication of efforts, benchmark with  high-performing agencies, keep abreast of current practices, enhance  efficiency, and increase the effectiveness of its programs.
Evaluate core succession training and development programs to assess  the extent to which programs contribute to enhancing organizational  capacity. When deciding the appropriate analytical approach and level  of evaluation, EPA should consider factors such as estimated costs of  training efforts, size of training audience, and program visibility, among  other things.
The Secretary of Labor should take the following action:  Seek appropriate opportunities to coordinate and share core succession  training and development programs with other outside agencies to  achieve economies of scale, limit duplication of efforts, benchmark with  high-performing agencies, keep abreast of current practices, enhance  efficiency, and increase the effectiveness of its programs.
The Secretary of VA should take the following two actions:  Seek appropriate opportunities to coordinate and share core succession  training and development programs with other outside agencies to  achieve economies of scale, limit duplication of efforts, benchmark with  high-performing agencies, keep abreast of current practices, enhance  efficiency, and increase the effectiveness of its programs.
Evaluate core succession training and development programs to assess  the extent to which programs contribute to enhancing organizational  capacity. When deciding the appropriate analytical approach and level  of evaluation, VHA should consider factors such as estimated costs of  training efforts, size of training audience, and program visibility, among  other things.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of Commerce, Labor,  and VA and the Administrator of EPA for their review and comment. In  addition, we provided a draft of this report to the Acting Director of OPM  and the CHCO Council’s Leadership and Succession Planning  Subcommittee for their information.
VA agreed with our findings and recommendations. In response to our  recommendation to seek opportunities to coordinate and share core  succession training and development programs, VA suggested that OPM  could act as a “clearinghouse” by gathering and publishing curricula and  other relevant training information from agencies, thus enabling agencies  to identify existing training programs across the government. We present  VA’s written comments in appendix II. DOC and the Census Bureau agreed  with our findings and our recommendations to seek opportunities to  coordinate core succession training and development programs and to  evaluate the extent to which these programs enhance organizational  capacity. In response to our recommendation to strengthen the monitoring of its mission-critical workforce, the Census Bureau stated that its existing  approach is effective in meeting its needs. However, as we discussed  earlier, the Census Bureau acknowledges that reengineering the 2010  Decennial Census requires new competencies. By not strengthening the  monitoring of its mission-critical workforce, the Census is at increased risk  that it will not have the skills it needs to be prepared to conduct the 2010  Census as efficiently or effectively as possible. For example, a lesson from  the 2000 Census was that while contracts for various projects supported  decennial census operations, they did so in many instances at a higher cost  than necessary because the Census Bureau did not have sufficient  contracting and program staff with the training and experience to manage  them. We present DOC’s and the Census Bureau’s written comments in  appendix III. DOL did not take issue with our findings, stated that it will  consider our recommendations, and provided technical comments, which  we incorporated as appropriate. EPA did not comment on our  recommendations, but provided a technical comment, which we  incorporated.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  date. At that time, we will provide copies of this report to other interested  congressional parties; the Secretaries of Commerce, Labor, and VA; the  Administrator of EPA; the Director of Census; the Acting Director of OPM;  and the CHCO Council’s Leadership and Succession Planning  Subcommittee. We will also make this report available at no 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  on (202) 512-6806 or at larencee@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix IV.
section_title: Objectives, Scope, and Methodology
paragraphs: To review how federal agencies are implementing succession planning and  management efforts, we selected the Department of Labor (DOL), the  Veterans Health Administration (VHA), the Environmental Protection  Agency (EPA), and the Census Bureau for our review. We considered the  nature of their succession challenges, agency missions, and prior GAO  human capital work conducted at these agencies. These agencies represent  an array of organizational structures, missions, and succession challenges.
We analyzed strategic, human capital, workforce, succession, and training  and development plans, performance contracts, human capital team  charters, and diversity information from the selected agencies. In addition,  we reviewed policies and guidance on succession-related issues from the  Office of Personnel Management (OPM), the Equal Employment  Opportunity Commission (EEOC), and the Merit Systems Protection Board  (MSPB) because of their responsibilities for ensuring the fair application of  personnel decisions, such as selection for training and development  programs. We also interviewed agency, OPM, EEOC, and MSPB officials  involved with strategic, human capital, and succession planning and  management.
The scope of our work did not include independent evaluation or  verification of the effectiveness of the succession planning and  management initiatives used in the four agencies, including any  performance results that agencies attributed to specific practices or  aspects of their programs. We assessed the reliability of staffing and  projection data provided to us by the Census Bureau, DOL, EPA, VHA, and  OPM to ensure the data we used in this report were complete and accurate  by (1) interviewing agency officials knowledgeable about the data and  (2) performing manual and electronic testing, when applicable. We  determined that these data were sufficiently reliable for the purposes of  this engagement.
To get the varied perspectives of agencies’ staff located in headquarters and  regional offices, we interviewed agency officials in Washington, D.C.;  Charlotte, North Carolina; and Los Angeles and San Francisco, California.  We conducted our study from June 2004 through April 2005.
section_title: Comments from the Department of Veterans Affairs
section_title: Comments from the Department of Commerce
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Lisa Shames, Naved Qureshi,  Peter Rumble, Jennifer Cooke, Erin Murello, and Elena Lipson made key  contributions to this report.