Human Capital: Workforce Diversity Governmentwide and at the Department of Homeland Security
Published: 2008-05-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Homeland Security (DHS) was created from a disparate group of agencies with multiple missions, values, and cultures into a cabinet department whose goals are to, among other things, protect U.S. borders and infrastructure, improve intelligence and information sharing, and prevent and respond to potential terrorist attacks. GAO designated the implementation and transformation of DHS as a high-risk area in 2003, and it remains so. While DHS has made progress, it continues to face challenges in transforming into an effective, integrated organization. In response to a request to provide information on diversity in DHS and steps DHS is taking to create and manage a diverse workforce, GAO is providing demographic data related to the federal government as a whole and DHS's workforce. GAO obtained these data from the Office of Personnel Management's (OPM) Central Personnel Data File (CPDF). GAO used its past work on leading diversity management practices (GAO-05-90) and reviewed data from DHS on its diversity management practices.
section_title: What GAO Found
paragraphs: Data in OPM's CPDF show that as of September 2007, the overall percentages of women and minorities have increased in the career SES governmentwide, the highest nonpolitically appointed leaders in the federal workforce, and the SES developmental pool for potential successors since September 2003. As part of GAO's recent analysis of the diversity of the SES and the SES developmental pool, GAO reviewed career, or permanent, SES appointments at DHS and DHS's SES developmental pool. During this 4-year period, the total number of career SES and those in the SES developmental pool for potential successors increased at DHS. The percentage of women in the SES increased, while the percentage of minorities decreased. For the SES developmental pool, the percentage of women and minorities increased. While GAO did not analyze the factors that contributed to changes in DHS's workforce for this period, OPM and the Equal Employment Opportunity Commission in their oversight roles require federal agencies, including DHS, to analyze their workforces. As part of a strategic human capital planning approach, agencies need to develop long-term strategies for acquiring, developing, motivating, and retaining a diverse workforce. An agency's human capital planning should address the demographic trends that the agency faces with its workforce, especially retirements, which provide opportunities for agencies to affect the diversity of their workforces. DHS reported taking steps to affect the diversity of its workforce. These steps are consistent with several leading diversity management practices: (1) a diversity strategy as part of its strategic plan, (2) recruitment, (3) employee involvement, and (4) succession planning. For example, DHS cited its use of intern programs for recruiting and its implementation of two leadership development programs for managing succession. GAO has not conducted a review of DHS's diversity management efforts; therefore, it cannot comment on the effectiveness of DHS's implementation of these practices.

section_title: Letter
paragraphs: I am pleased to be here today to provide the Committee with information  on diversity of the federal workforce and at the Department of Homeland  Security (DHS), which was created from a disparate group of 22 agencies  with multiple missions, values, and cultures into a cabinet department  whose goals are to, among other things, protect U.S. borders and  infrastructure, improve intelligence and information sharing, and prevent  and respond to potential terrorist attacks. Since its inception in March  2003, DHS has faced enormous challenges related to protecting the nation  from terrorism while organizing its predecessor agencies—several with  existing program and management challenges—into a coherent and  integrated department.
Because these challenges could have serious consequences for the  security of our country, we designated the department’s implementation  and transformation a high-risk area in 2003 and reiterated our concerns in  January 2005 and again in January 2007. One key challenge DHS has faced  is effectively and strategically managing its sizable workforce of nearly  167,000 employees in order to respond to current and emerging 21st  century challenges. Strategic human capital management must be the  centerpiece of any serious change management strategy. Also, given the  changing demographics of our society, diversity management is a key  aspect of strategic human capital management. Developing a workforce  that reflects all segments of society and our nation’s diversity is a  significant part of an agency’s transformation of its organization to meet  the challenges of the 21st century.
Today, as requested, my remarks will focus on demographic data related  to career positions in the federal government as a whole and DHS’s  workforce as well as actions the department has reported taking to create  and manage a diverse workforce. For our analyses of governmentwide  career and DHS career demographic data, we extracted data from the  Office of Personnel Management’s (OPM) Central Personnel Data File  (CPDF) and analyzed these data to identify the extent of changes in the  representation of women and minorities in DHS’s workforce between  September 2003 and September 2007. However, we did not analyze the  factors that contributed to changes identified in DHS’s workforce over this  4-year period. We believe the CPDF is sufficiently reliable for the  informational purpose of this testimony. We previously reported that  governmentwide data from the CPDF for the key variables reported in this  testimony—agency, gender, race or national origin, and pay plan or  grade—were 96 percent or more accurate. We also obtained information  from DHS on recruitment and other strategies used to develop and sustain  a diverse workforce. We conducted this performance audit in May 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
In summary, when comparing DHS-wide data to governmentwide  representation data, the greatest differences were among Hispanic men  and White women—in both 2003 and 2007 the representation of Hispanic  men was more than 10 percentage points higher than the representation  governmentwide, and for White women, the representation was nearly 10  percentage points lower. When reviewing representation by pay  plan/grades, among the higher grades—general schedule (GS) GS-13 to  GS-15, Senior Executive Service (SES), and Senior Level/Senior Technical  (SL/ST)—minority employees generally represented less than 10 percent  of these career employees in 2003 and 2007. The total number of career  SES at DHS increased by more than 50 percent between 2003 and 2007— going from 208 to 325. Overall minorities decreased from 15.9 percent of  the total SES in 2003 to 13.2 percent in 2007. For the DHS developmental  pool of potential SES successors (generally GS-15s and GS-14s), the total  number increased by more than 50 percent—going from 6,525 to 10,107.  White men decreased by 4.2 percentage points, and minorities increased  by 4.6 percentage points. DHS reported taking steps to affect the diversity  of its workforce that include establishing an objective in its strategic plan  concerning the recruitment and development, among other things, of a  diverse workforce; partnering with minority-serving institutions and  professional service organizations; and implementing an SES candidate  development program.  These steps are consistent with several leading  diversity management practices.
subsections: section_title: Representation of Women and Minorities Governmentwide and at DHS in 2003 and 2007
paragraphs: DHS, one of the 24 Chief Financial Officer (CFO) Act agencies, was  formed from 22 agencies, including the following agencies or parts of  agencies: the U.S. Customs Service, which was formerly located in the  Department of the Treasury; the Federal Emergency Management Agency;  the Coast Guard; and most of the Immigration and Naturalization Service,  which was formerly located in the Department of Justice.
subsections: section_title: Representation of Career Employees DHS-wide and Governmentwide
paragraphs: Tables 1 and 2 show the representation of career employees at DHS and  governmentwide as of September 2003 and September 2007, respectively.
There were slight increases in percentage points among nearly all minority  groups DHS-wide between 2003 and 2007. The greatest change DHS-wide  was a decrease in White men. The greatest differences between the  governmentwide data and DHS-wide data were among Hispanic men— in  both 2003 and 2007 the representation of Hispanic men was more than 10  percentage points higher than the representation governmentwide, and for  White women, the representation was nearly 10 percentage points lower.  For both 2003 and 2007, the representation of women at DHS, with the  exception of Hispanic women, was below the governmentwide level, the  biggest difference being among White and African American women. See  appendix I for a breakdown of the DHS-wide representation data by DHS  components.
section_title: Representation at DHS by Pay Plan/Grade
paragraphs: Taking a closer look at the DHS-wide data, table 3 shows the  representation of career employees at DHS by pay plan/grade as of  September 2003. Minority employees generally represented less than 10  percent of career employees among all the pay plans and grades.  Examples of the exceptions included the representation of Hispanic men  in the blue collar pay plan, grades 5 to 8, and grades 9 to 12, where they  ranged from 15 to over 21 percent. In grades 1 to 4, African American  women represented over 17 percent, and Hispanic women represented  nearly 13 percent of employees. Among the higher grades and pay plans— grades GS-13 to GS-15, SES, and SL/ST—the percentage of White women  ranged from over 17 to more than 22 percent, and no minority group  exceeded 9 percent of career employees.
By 2007, the representation of career employees at DHS by pay plan/grade  showed only slight increases and decreases. Exceptions, as shown in table  4, were in the percentage of White men in the SL/ST pay plan, which  increased from 0 percent in 2003 to more than 65 percent in 2007, and  White women, which during this period in the same pay plan increased  from 0 percent to almost 28 percent. The representation of minorities was  still less than 10 percent in grades GS-13 and above.
section_title: Representation in Career SES Governmentwide and at DHS
paragraphs: As we have reported, leadership in agencies across the federal  government, especially at senior executive levels, is essential to providing  accountable, committed, consistent, and sustained attention to human  capital and related organizational transformation issues. Having a diverse  SES corps, which generally represents the most experienced segment of  the federal workforce, can be an organizational strength that can bring a  wider variety of perspectives and approaches to bear on policy  development and implementation, strategic planning, problem solving, and  decision making.
The members of the career SES are the highest nonpolitically appointed  leaders in the federal workforce, and we recently looked more closely at  their representation governmentwide. Table 5 shows the total number of  career SES and the percentage of women and minority SES in DHS and at  the 23 other CFO Act agencies in 2003 and 2007. Overall at DHS, the total  number of SES increased by more than 50 percent between 2003 and 2007  going from 208 to 325. Within that total, the percentage of women  increased from 21.2 percent to 26.2 percent. In 2003, the representation of  women within individual CFO Act agencies ranged from 15.9 to 40.7  percent, with more than two-thirds of the agencies having at least 25  percent women—DHS had 21.2 percent. The representation of minorities  within the CFO Act agencies in 2003 ranged from 7.2 to 42.0 percent with  more than two-thirds having at least 15 percent minorities—DHS had 15.9  percent. In 2007, the representation of women at these agencies ranged  from 19.9 to 45.5 percent, with more than half of the agencies having 30  percent or more women—DHS had 26.2 percent. For minority  representation, CFO Act agency rates ranged from 6.1 to 43.8 percent, with  two-thirds having at least 15 percent or more minorities—DHS had 13.2  percent.
Minority representation in the career SES governmentwide generally  increased by less than 1 percentage point from September 2003 through  September 2007 as shown in table 6. During this period, the representation  of men in the SES decreased by 2.6 percentage points, and White men by  2.7 percentage points; whereas, the percentage of women increased by 2.7  percentage points.
At DHS, the extent of change in the representation of career SES  employees was generally greater than the change that occurred in the  governmentwide SES from September 2003 through September 2007. For  example, as shown in table 7, the percentage of White women in DHS’s  career SES was 23.1 percent in 2007, 5.8 percentage points above the 2003  rate of 17.3 percent. White men and African American men experienced  the largest decrease in their representation in the career SES by 2007,  dropping 3.1 and 2.3 percentage points, respectively. Overall, minorities  decreased from 15.9 to 13.2 percent.
section_title: Representation in the Career SES Developmental Pool Governmentwide and at DHS
paragraphs: The vast majority of potential successors for career SES positions will  come from the GS pay plan for grades GS-15 and GS-14, the levels that  serve as the SES developmental pool. Table 8 shows the changes in the  representation of the SES developmental pool governmentwide from  September 2003 to September 2007. Governmentwide, the total number of  employees in the SES developmental pool decreased slightly from  September 2003 to September 2007. The greatest change in representation  was a decrease of 5.3 percentage points in the number of White men from  2003 to 2007. The percentage of women in the governmentwide SES  developmental pool increased by 3.9 percentage points between 2003 and  2007, but the percentage of men in this developmental pool decreased by  this same amount. By 2007, the representation of each of the minority  groups in the governmentwide SES developmental pool increased by 1.3  percentage points or fewer, resulting in an overall increase of 3.7  percentage points for minorities.
Unlike the total number of employees in the governmentwide SES  developmental pool, those in DHS’s SES developmental pool increased by  more than half. The two greatest changes in representation within DHS’s  career SES developmental pool from September 2003 through September  2007 were for White men, which decreased by 4.2 percentage points, and  minorities, which increased by 4.6 percentage points, of which African  American women increased by 1.8 percentage points, as shown in table 9.
While we did not analyze factors that contributed to changes in DHS  workforce from September 2003 through September 2007, OPM and the  Equal Employment Opportunity Commission (EEOC) in their oversight  roles require federal agencies, including DHS, to analyze their workforces.  Both OPM and EEOC also report on governmentwide representation  levels. Under OPM’s regulations implementing the Federal Equal  Opportunity Recruitment Program (FEORP), agencies are required to  determine where representation levels for covered groups are lower than  the civilian labor force (CLF) and take steps to address those differences.  EEOC’s Management Directive 715 (MD-715) provides guidance and  standards to federal agencies for establishing and maintaining effective  equal employment opportunity (EEO) programs, including a framework  for executive branch agencies to help ensure effective management,  accountability, and self-analysis to determine whether barriers to EEO  exist and to identify and develop strategies to mitigate or eliminate the  barriers to participation. Specifically EEOC’s MD-715 states that agency  personnel programs and policies should be evaluated regularly to  ascertain whether such programs have any barriers that tend to limit or  restrict equitable opportunities for open competition in the workplace.  The initial step is for agencies to analyze their workforce data with  designated benchmarks, including the CLF. If analysis of their workforce  profiles identifies potential barriers, agencies are to examine all related  policies, procedures, and practices to determine whether an actual barrier  exists. EEOC requires agencies to report the results of their analyses  annually.
section_title: DHS Has Reported Taking Steps to Affect the Diversity of Its Workforce That Are Consistent with Leading Diversity Management Practices
paragraphs: A high-performance organization relies on a dynamic workforce with the  requisite talents and up-to-date skills to ensure that it is equipped to  accomplish its mission and achieve its goals. 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 which provides both accountability and fairness for  all employees. In addition, the approach that a high-performance  organization takes toward its workforce is inclusive and draws on the  strengths of employees at all levels and of all backgrounds. This approach  is consistent with that of diversity management. We have defined diversity  management as a process intended to create and maintain a positive work  environment where the similarities and differences of individuals are  valued, so that all can reach their potential and maximize their  contributions to an organization’s strategic goals and objectives. In our  past work, we identified nine leading practices in diversity management  that experts agreed should be present in some combination for creating  and managing diversity. The leading diversity management practices  identified by a majority of experts were as follows:    Top leadership commitment—a vision of diversity demonstrated and  communicated throughout an organization by top-level management.
Diversity as part of an organization’s strategic plan—a diversity  strategy and plan that are developed and aligned with the  organization’s strategic plan.
Diversity linked to performance—the understanding that a more  diverse and inclusive work environment can yield greater productivity  and help improve individual and organizational performance.
Measurement—a set of quantitative and qualitative measures of the  effect of various aspects of an overall diversity program.
Accountability—the means to ensure that leaders are responsible for  diversity by linking their performance assessment and compensation to  the progress of diversity initiatives.
Succession planning—an ongoing, strategic process for identifying  and developing a diverse pool of talent for an organization’s potential  future leaders.
Recruitment—the process of attracting a supply of qualified, diverse  applicants for employment.
Employee involvement—the contribution of employees in driving  diversity throughout an organization.
Diversity training—organizational efforts to inform and educate  management and staff about diversity.
DHS’s Acting Chief Human Capital Officer (CHCO) testified in April 2008  on actions the Department is taking to create and manage its workforce.  These actions are consistent with leading diversity management practices  in four areas: (1) a diversity strategy as part of its strategic plan, (2)  recruitment, (3) employee involvement, and (4) succession planning. We  have not conducted a review of DHS’s diversity management efforts;  therefore, we cannot comment on the effectiveness of DHS’s  implementation of these practices. In addition, because we do not  highlight a particular practice, it is not meant to imply success or lack of  success by DHS in implementing other diversity management practices.
Diversity strategy as part of the strategic plan. DHS established an  objective in its 2004 Strategic Plan to “ensure effective recruitment,  development, compensation, succession management and leadership of a  diverse workforce to provide optimal service at a responsible cost.” In an  August 2007 progress report on implementation of mission and  management functions, we indicated that DHS had taken action to satisfy  most of the elements related to developing a results-oriented strategic  human capital plan. We noted that in addition to the strategic human  capital plan that DHS issued in October 2004, which covers 2004 to 2008,  the department developed a fiscal year 2007 and 2008 Human Capital  Operational Plan, which provides measurable goals that the department is  using to gauge the effectiveness of its human capital efforts. DHS officials  provided us with a copy of DHS’s Corporate Diversity Strategy, issued in  March 2008, and stated that the department has developed a Diversity  Action Plan, which it plans to submit to the DHS Diversity Council for  approval in May 2008. The Diversity Strategy outlines DHS’s policy of  encouraging a diverse workforce and the value of a diverse workforce in  accomplishing DHS’s mission. Among the guiding principles is integrating  diversity into the organization culture rather than as a stand alone  program and recognizing that diversity is a matter of equity and fairness.  To help ensure accountability, among other things, the strategy calls for  establishing a senior-level Diversity Council, which DHS officials reported  has been done, integrating diversity strategies into DHS’s comprehensive  human resource operation, and ensuring that all DHS leaders have access  to training, tools, and support needed to serve as de facto diversity  champions.
Recruitment. To achieve its strategic plan objective of a diverse  workforce, in his April 2008 testimony, DHS’s Acting CHCO stated that  recruitment strategies have been implemented at the department and  component levels to improve diversity of the DHS talent pool. DHS  officials told us that the department partners with several minority-serving  institutions and participates in several intern, scholarship, and fellowship  programs; officials provided a recruitment brochure. These officials also  indicated that in October 2007, the DHS began a Veterans’ Outreach  Program as a means of recruiting a diverse workforce. This outreach  strategy consists of (1) a Web site for one-stop employment and other  information, (2) an advisory forum of external veterans as stakeholders,  and (3) training in veterans’ preference and reemployment rights for EEO  and human capital specialists. DHS has also created an SES-level Director  of Recruiting and Diversity within the Chief Human Capital Office.
Employee Involvement. Employees can make valuable contributions in  driving diversity throughout an organization. Our work on leading  diversity management practices identified several forms these  contributions can take, including mentoring and community outreach with  private employers, public schools, and universities. DHS officials  described actions the department is taking to provide opportunities for  employees at various levels throughout the department to receive  mentoring. In addition, DHS officials stated that they have developed  formal partnerships with minority professional service organizations,  including the Urban League’s Black Executive Exchange Program, where  DHS provides speakers that participate in outreach programs at  historically black colleges and universities. DHS officials indicated they  are pursuing similar partnerships with the National Association of  Hispanic Federal Executives, the African American Federal Executive  Association, and the Asian American Executive Network.
Succession Planning. Succession planning is a comprehensive, ongoing  strategic process that provides for forecasting an organization’s senior  leadership and other needs; identifying and developing candidates who  have the potential to be future leaders; and selecting individuals from  among a diverse pool of qualified candidates to meet executive resource  needs. Succession planning and management can help an organization  become what it needs to be, rather than simply recreate the existing  organization. Leading organizations go beyond a “replacement” approach  that focuses on identifying particular individuals as possible successors  for specific top-ranking positions and engage in broad, integrated  succession planning and management efforts that focus on strengthening  both current and future capacity. They anticipate the need for leaders and  other key employees with the necessary competencies to successfully  meet the complex challenges of the 21st century.
For DHS, in addition to the changes that will occur as a result of the  upcoming new administration, several factors including recent turnover  and expected retirements provide opportunities for DHS to affect the  diversity of its workforce and highlight the importance of succession  planning. Recently, we reported that the overall attrition rates for  permanent DHS employees (excluding SES and presidential appointees) at  8 percent and 7 percent in 2005 and 2006, respectively, exceeded the 4  percent average rate for all cabinet-level agencies. These higher attrition  rates, about 14 to 17 percent, were among transportation security officers  in DHS’s Transportation Security Administration. The attrition rate for  SES and presidential appointees was also higher than the average senior- level attrition rate for all cabinet-level departments. As for retirements,  about 20 percent of career employees at DHS as of fiscal year 2007 are  projected to be eligible to retire by 2012, and certain key occupations  within the department are expected to have high retirement eligibility  rates, such as customs and border protection agents—about 51 percent.
In 2006, OPM reported that approximately 60 percent of the executive  branch’s 1.6 million white-collar employees and 90 percent of about 6,000  federal executives will be eligible for retirement over the next 10 years.  Considering retirement eligibility and actual retirement rates of the SES is  important because individuals normally do not enter the SES until well  into their careers; thus SES retirement eligibility is much higher than for  the workforce in general. If a significant number of SES members were to  retire, it could result in a loss of leadership continuity, institutional  knowledge, and expertise among the SES corps, with the degree of loss  varying among agencies and occupations.
Succession planning also is tied to the federal government’s opportunity to  affect the diversity of the executive corps through new appointments.  Racial, ethnic, and gender diversity in the SES is an important component  for the effective operation of the government. In September 2003, we  reported that agencies in other countries use succession planning and  management to achieve a more diverse workforce, maintain their  leadership capacity, and increase the retention of high-potential staff.
According to the Acting CHCO’s April 3, 2008, testimony and discussion  with senior level human capital officials, the department is taking steps to  develop a qualified and diverse pool of applicants for SES positions by  preparing its mid-career employees through a variety of leadership  development programs. These programs include the DHS SES Candidate  Development Program (primarily for GS-15s) and the DHS Fellows  Program (for GS-13s, GS-14s, and GS-15s). See appendix II for  representation data for both programs since their inception. According to  DHS officials, the DHS Fellows Program, initiated in 2006, is a competitive  developmental program where participants are placed in high-visibility  rotational assignments, receive training in such areas as leadership, and  form small groups to work on specific projects. After completion of this  11-month program, participants remain in their current assignments but,  according to DHS officials, are prepared for advancement when the  opportunities arise. Participants in both of the DHS leadership programs  receive mentoring and coaching and rotational assignments. However,  according to DHS officials, employees at other levels of the organization  can also participate in ad hoc mentoring and rotational assignments.  Effective training and development programs can enhance the federal  government’s ability to prepare its workforce and thereby achieve results.  The efforts that DHS officials described are consistent with these  practices.
Chairman Thompson, Ranking Member King, and Members of the  Committee, this concludes my prepared statement. I would be pleased to  respond to any questions that you may have.
section_title: Contacts and Acknowledgments
paragraphs: For further information regarding this statement, please contact George  Stalcup, Director, Strategic Issues, on (202) 512-6806 or at  stalcupg@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this  statement. Individuals making key contributions to this statement included  Belva Martin and Kiki Theodoropoulos, Assistant Directors; Karin  Fangman; Mary Y. Martin; and Greg Wilmoth.
section_title: Appendix I: Department of Homeland Security Representation Data by Component
paragraphs: Tables 10 and 11 below provide demographic data by race and gender on  the Department of Homeland Security’s (DHS) career employees by DHS  component for September 2003 and September 2007. In 2003 and 2007, the  U.S. Customs and Border Protection (USCBP) and the U.S. Immigration  Customs Enforcement (USICE) had the highest percentage of Hispanic  men, while the Transportation Security Administration (TSA) had the  highest percentage of African American men.
section_title: Appendix II: Representation Data for DHS Leadership Development Programs
paragraphs: DHS officials stated that they have two formal leadership development  programs to prepare future DHS leaders: the DHS Fellows Program for GS- 13, GS-14, and GS-15 staff (an 11-month program) and the DHS Senior  Executive Service (SES) Candidate Development Program, generally for  GS-15s (an 18-month program). Tables 12 and 13 below provide a  breakdown of the representation of women and minorities in each of these  programs.